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Matt Hermann | |612-221-7592
Traci Peterson | |612-386-8577

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Is fall the best time to buy and sell a home?

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While you’ve undoubtedly heard about spring market frenzy, you may not know what to expect when buying or selling a home in the fall. Many find that buying and selling in autumn is less stressful and allows them to use the winter to build a feeling of home.

Here are insights you can use as you consider buying or selling a home in Minnesota or western Wisconsin this fall.

Something’s in the air

Before we get into the market numbers, let’s discuss what Edina Realty regional manager Marge Kane calls “the fall feeling.” Whether you’ve lived in the Midwest your whole life or recently moved here, you’ll notice that as the air and leaves get crisper, everything seems a little smoother than it did in the summer. (Even attending three soccer games on the weekend feels refreshing when you have a flannel blanket and a warm cup of coffee on the sidelines.)

Similarly, fall just feels like a great time to start over in a new home. “Many buyers have mentioned that they love moving into a new home in fall because it’s the right time for a fresh start. Plus, when you move in the fall, you get to spend your winter ‘nesting’ and really making a home your own. If you buy in the spring, you’re more likely to be outside and less likely to paint, decorate or organize for the long-term during those first few months of homeownership,” explains Kane.

Digging into the numbers

Fall may feel like the right time to move, but what do the housing market numbers say?

Annual national market trends show that since 1999, the most popular months for home sales are May, June, July and August; comparatively, November, December, January and February tend to be the slowest months for real estate activity, according to information published by the National Association of REALTORS®. Generally speaking, real estate activity moderates in autumn months as renters stay put and families with children avoid changing school districts mid-year.

While spring and summer are known as the peak times in the market, the housing market doesn’t hibernate when the leaves start to turn colors. In these more moderate sales months, motivated buyers and sellers tend to work toward straightforward, mutually beneficial transactions.

What fall sellers should expect

Sellers with homes under the $300,000 price point will likely still see a flurry of showings after they list, given the high demand for the limited inventory of homes for sale in this price point. Sellers with higher-priced homes should neither expect a bidding war nor lowball bids; in 2019, the average seller has recouped at least 97% of their original list price.

In the fall, open houses and showings are usually attended by serious buyers. This could mean that you see less in-person traffic than you would if you listed in April, but you’ll also host fewer “looky-loos” who are unlikely to make an offer. Selling in the fall could also mean a faster path to closing, as your buyers likely have a reason to be entering the market at this time and may be motivated to get settled before the holidays.

Remember, today’s buyers are discerning and have high standards. Sellers should work to build curb appeal and fix up the interior of their home to show pride of ownership before listing their homes for sale.

What fall buyers should expect

Above all, buyers can expect more buying power! Low, low interest rates make it a great time to be a buyer (the best time in years, in fact). If you were pre-approved for a loan before the interest rates fell in early August, you may want to ask your mortgage consultant to run the numbers again. Even a small dip in interest rates can lead to a boost in buying power.

Buyers who attend open houses will see that they are less crowded than in the spring and summer months. This could mean that you have less competition, or it could mean the competition is fierce with a small pool of equally motivated buyers. Reach out any time for insights on the inventory and desirability of your selected neighborhood and price point.

Should buyers be worried about a recession?

Would-be buyers may be wary as whispers of a potential recession grow louder. It’s important to remember that after the last market downturn, stricter mortgage standards were put into place to help ensure responsible borrowing and lending. When you apply for a mortgage, your mortgage consultant will help you understand how to build a responsible buying budget that takes into account your goals and retirement plans.

Last, unemployment is another factor that tends to help predict market shifts. For now, unemployment remains low in Minnesota and western Wisconsin.

Thinking of getting started?

As you can see, the fall is about more than pumpkin-flavored treats and bagging up that ever-growing leaf pile. If you’re thinking of buying a home or are ready to put your property on the market, reach out now to get started.

For even more insights on the process of home buying or selling, follow #BuyerInsights and #SellerInsights on Facebook, Instagram and Twitter.

Why isn’t anyone building starter homes?

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Key insights

  • Starter homes are in high demand, so why aren’t builders building less expensive homes?
  • In addition to land, labor and building materials, builders have to factor in regulatory fees when determining their developments.
  • High regulatory fees can also make it difficult for builders to add any new construction in the starter home price point.

The median home price of a Twin Cities single-family home rose to $285,000 in July — but many buyers are still hoping for a starter home in the low or mid-200’s. The competition in these lower price points is fierce, with buyers snapping up properties in days or even hours.

So why, even with the consistently growing demand for these lower-priced homes, are there so few new construction options for this demographic of buyers?

The short answer is that between materials, labor, land and required permits, many builders simply can’t afford to build anything in that price range. Let’s explore why.

The cost of building a new construction home

When building new construction, builders have to first consider the cost of land. Builders may purchase large plots of land, where they plan to put up communities with hundreds of homes. In other cases, they may buy a smaller plot of land with plans for just a few homes. As with any real estate transaction, plots closer to the city or with good commute potential tend to be more expensive than rural plots.

Builders must also take into consideration the materials and labor required to build each property. There are hundreds of tasks that must be completed for each home; builders hire contractors and specialists who complete everything from laying foundation to custom-building cabinets to wiring the home for electricity.

In recent years, builders have seen a labor shortage. Commercial and residential new construction has been rising steadily as the economy has gained steam, but many of the workers who left the industry during the recession have not returned to their previous line of work. With this labor shortage and (to a lesser extent) the rising costs of materials, a recent report featured in an article by MinnPost shows labor and materials costs in the Minneapolis metro area have gone up by a third since 2009.

And then there are the regulatory channels. In both Minnesota and Wisconsin, the builder needs to get a permit to build. They’ll also work with the natural resource department(s) to review potential issues related to stormwater, wetlands and watershed. They may also need to work with the park department to pay park fees or even build a new park for the community.

All of these costs add up, and in Minnesota, they can add up to between 20-30% of the total cost of a new construction home, according to the Star Tribune. In Wisconsin, the regulatory costs tend to make up less of the total cost.

The cost of building in Minnesota vs. Wisconsin

According to a recent study from Housing First Minnesota, a homebuyer purchasing a new construction home in Wisconsin could save tens of thousands of dollars over a homebuyer purchasing the exact same property in Minnesota.

From Kare 11 News:

“Housing First Minnesota partnered up for a study about this topic and broke down the estimated cost of a new house in Corcoran, Minnesota. The estimated construction cost is $182,000. The administrative costs that go into it were estimated at $56,000. The total cost of the home came in at $372,000.
“The study estimated the exact same build in the community of Hudson, Wisconsin and the total price was $43,000 cheaper, with the savings split between land and administrative costs.”

In other words, Wisconsin land tends to be cheaper and their regulatory fees are less expensive, too. Overall, it means that Wisconsin buyers may be able to access a wider variety of affordable housing options than Minnesota buyers.

Need to find a starter home?

We work every day to help buyers within every budget. We’re confident that we can help you find your dream home, whether it’s a stunning new construction property or an historic home with plenty of charm.Get in touch today to get started.

Homebuyer dictionary: Every term you need to know

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Buying a home is one of the biggest investments an individual can make. Whether you’re a first-time homebuyer or you’re preparing to re-enter the home buying market, there are many real estate terms to know.

For help keeping it all straight, refer to our homebuyer dictionary throughout your home buying journey.

Adjustable-rate mortgage (ARM)

Most homebuyers take out loans when purchasing a home. An adjustable-rate mortgage (ARM), typically has a lower interest rate at the beginning of the loan period. Depending on your specific loan, the initial rate can be locked in for a specific period of time. Then, once the introductory period is complete, the loan will readjust annually based on the market index.

Closing costs

Homebuyers and sellers both pay closing costs at the time of sale. For a buyer, closing costs usually include fees associated with the home loan, inspection, appraisal, taxes, homeowner’s insurance and title insurance. Buyer-related closing costs can range from 2 to 5% of the total home price.

In certain cases, a buyer may ask the seller to pay for some or all of their closing costs during the negotiation of the home sale.

“Comps”

Comparable sales, or “comps,” is a term used to describe homes of similar condition to the home you wish to buy. When you are determining how much to offer on a home, your REALTOR® may provide you with comps to help you determine a fair offer. Homes that are included in your comps will be nearby and of similar size and condition.

Conforming loan

A conforming loan is meant to meet (or conform to) standards that are established by Fannie Mae and Freddie Mac, which are two government-sponsored institutions that purchase and sell mortgages on the second market.

Conforming loans limit the borrowing amount a buyer can borrow. In Minnesota and Wisconsin, a single-family home loan must be under $484,350 to be considered a conforming loan. Multi-unit properties may have higher borrowing limits.

Conventional loan

Conventional loans are not guaranteed or insured by the federal government, and lenders minimize their risk by having more stringent standards for conventional loan borrowers. The minimum down payment for a conventional loan is 5%, but buyers are encouraged to make a down payment of 20% if they are able. There are two types of conventional loans, conforming loans and non-conforming loans.

Contingent

When searching for homes to buy, you may find some listed as contingent. A contingent property is under contract with another buyer. However, the final sale of the house is dependent, or contingent on certain conditions that must be met. If the conditions (including inspection, the buyer’s ability to obtain financing, appraisal) are not met, the home may come back on the market.

Credit score

Lenders evaluate the likelihood that you will repay your mortgage loan based partially on your credit score. A credit score is determined by your payment history, amount of debt, length of credit history and a variety of other factors. In general, a higher credit score will increase your chances at scoring the best loan terms. However, there are ways to get a mortgage with a low credit score.

Down payment

The down payment is a lump sum of money that buyers are required to pay when purchasing a home. It is a portion of the total home sale price that is paid out-of-pocket to seal the deal. Down payments typically range from 3% to 20%, or more, of the total selling price.

Down payment assistance programs

Down payment assistance programs are available to help individuals as they purchase a home. Various down payment programs exist, and each has different qualification guidelines. Typically, these programs include loan assistance, closing cost coverage and other financial support.

Escrow

Escrow is when a neutral third-party holds onto something of value for a predetermined amount of time. In Minnesota and Wisconsin, escrow is only used after you have purchased your home. If you financed your home, you will begin sending monthly payments to your lender. Your lender will collect your mortgage premium and interest, but they will also collect money to be paid out for your property taxes, homeowner’s insurance and mortgage insurance. Your lender will keep the extra money “in escrow” until the payments become due, then they will make these payments on your behalf. In addition, if there is work that needs to be done on the property (like the replacement of a roof), funds may be held in escrow to ensure that the work gets done.

FHA loan

The Federal Housing Administration grants FHA loans, or “helper” loans, for buyers who can afford a monthly mortgage payment but may struggle with other aspects of getting approved for a loan or who have limited funds to make a down payment. For this reason, FHA loans are great for first-time buyers. Keep in mind, FHA loans are a bit riskier for lenders to take on, so FHA borrowers will have extra expenses like mortgage insurance.

First-time homebuyer savings account

A first-time homebuyer savings account offers a tax incentive to individuals who are saving for a home purchase. In addition to the homebuyers, other people (like parents and grandparents) can contribute to the home savings account.

Fixed-rate mortgage

With a fixed-rate mortgage, your initial interest rate will not change over the life of the loan. This type of loan offers predictable monthly payments of principal and interest.

Homeowner’s insurance

Homeowner's insurance helps protect your property from natural disasters, theft and other unexpected circumstances. In most cases, your homeowners insurance premium will become a part of your monthly mortgage payment, along with your principal, interest and taxes.

Interest rate

Your interest rate is the monthly interest charged on your home mortgage loan. Interest is calculated as a percentage of your total loan balance. Depending on what kind of loan you have — fixed-rate mortgage or adjustable-rate mortgage (ARM) — your interest rate may stay the same or change over time.

Listing

When searching for a home to buy, your real estate agent may tell you that they are taking you to see a few listings. Listing is just another name for a home that’s been “listed” for sale and is available on the market.

Multiple listing service

Real estate agents post their active properties on the multiple listing service (MLS). This online resource allows agents to publish their active property listings so they can be found by other real estate agents and potential buyers. MLS listings offer information such as home prices, property details and photos.

When you search for homes on Edina Realty, you’ll see the most accurate search of active, available for-sale homes in Minnesota and western Wisconsin.

Mortgage

A mortgage is a document, signed by a borrower, that gives the lender a security interest in the property. The mortgage is recorded against the title to the property. If the borrower fails to make mortgage payments, the bank may foreclose on the mortgage and take ownership of the property.

Mortgage loan

A home mortgage loan is the amount of money you have borrowed from the bank to purchase your home. Typically, mortgage loans are paid back in 15 or 30-year terms.

The mortgage loan is primarily made up of principal and interest. In short, principal is the total balance of the loan and interest is the percentage of the loan that a homeowner pays their lender in exchange for borrowing money. Homeowners contribute monthly payments to pay off their mortgage loan.

Mortgage gift funds

A mortgage gift fund, also known as a down payment gift, is monetary help that close family and friends may offer homebuyers to afford the down payment of their home. Depending on the size of the mortgage gift fund, the money must be closely recorded and tracked throughout the home loan process.

Mortgage insurance

When buying a home, your lender may request that you pay mortgage insurance as part of your loan terms. This insurance protects the lender if for some reason you become unable to pay your monthly mortgage payment.

Pending

After most of the contingencies have been removed from a homebuyer’s initial offer, the home’s status will update to pending. A pending property indicates that the sale is moving forward toward closing. Usually, a pending sale only requires a financial contingency, title sign-off and final walk-through to be considered complete.

Pre-approval

When buying a home, you will need to submit an official mortgage application and documented financial history to your home loan lender. After the home loan lender validates your information, you will be pre-approved for a mortgage. With your pre-approval notice, you’ll also receive an estimate of the loan amount that you’ll be approved for, along with potential interest rates.

Pre-qualification

For a rough estimate of home loan options, buyers may choose to get pre-qualified for a loan. This is a less official step in comparison to pre-approval. However, you can get an idea of your buying power with a pre-qualification via automated online or phone questionnaires. Pre-qualification provides a general idea of what your home loan could be, and it should only be used for personal reference.

Principal

Your home mortgage loan is primarily made up of principal and interest. Principal is the outstanding balance of your mortgage. In other words, principal is the total amount of your home sale price, minus any payments you have made on its balance. This is separate from the interest you pay on your mortgage, which is a percentage paid in addition to the principal of your loan.

Realtor

When purchasing a home, you will likely work with a Realtor to find your ideal property. Realtors have even more qualifications than real estate agents. Realtors have pledged to follow the code of ethics established by the National Association of Realtors. This pledge is a strict commitment, indicating that the needs of the client will be put first. All Edina Realty agents are proud to be Realtors.

VA loan

VA loans are available to many military, veterans, reservists and National Guard members. Additionally, spouses of military members who died on active duty, or due to a disability or injury from military service, are also eligible to apply for VA loans. VA loans may provide short-term advantages and benefits for the entire life of the loan.

Ready to buy?

By now, you’re well-versed in buying terms. For additional help in the home purchase process, reach out today and we’ll get to work!

How do I choose the right size rug for a room?

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Key insights

  • Choosing the right rug for a space can be tricky if you don’t know the rules that interior designers live by.
  • In general, it’s best to size up if you’re between two different rug sizes.
  • It’s important to consider the size of your room and furniture when choosing a rug for a space.

Whether you’ve moved into a new house or have decided it’s time to spruce up your existing space, you may wonder what size rugs you should buy for a bedroom, dining room or living space. After all, the right rug can help define a space and give it the decorative boost it needs, but a too-small rug can actually make a room look smaller or more cluttered.

So, how do you find the right size rug for a room? To answer this, we interviewed Robin Strangis, American Society of Interior Designers member and interior designer at Loring Interiors in International Market Square. Let’s dive in!

When it comes to choosing a bedroom rug, you’ll need to consider the size of the room, bed and nightstands, says Strangis. “I always like it when the edges of the rug line up with the edges of the nightstand. It creates an enclosed area around where you sleep. And when you include the nightstands under your rug, it means that you’ll be stepping out of bed onto the rug. That’s ideal — you don’t want to step out of bed onto hardwood.”

When it comes to smaller bedrooms or kids’ bedrooms, the same rules apply. Strangis says that you can get away with a 5x7’ rug under a twin bed; it will enclose the bed and still (likely) leave some space for other bedroom furniture on adjacent walls.

Should the living room furniture all fit on the rug?

If the space is large enough, it’s best to have all the furniture on the living room rug. But that’s not a hard-and-fast rule, says Strangis.

“We used to have a rule, years ago, that a piece of furniture shouldn’t be half on and half off the rug in the living room. That’s no longer true. These days, if you have to move the rug so it’s halfway under the sofa, but it extends past the chairs in the same arrangement, that’s okay. That would be better than having the rug under the whole sofa, but the chairs not on it at all.”

What’s the right size rug for a dining room?

When selecting a dining room rug, consider pile height in addition to size, says Strangis.

“Ideally it’s nice to have a rug that’s 30 inches all around the table. That way, when you pull out your chair, it won’t catch on the end of the rug. But if you don’t have enough space for the chairs to stay on the rug as you pull back, then be sure to choose a low-pile height rather than a thicker, plush rug.”

Choosing rugs for an open floor plan

With the rise of open floor plans, rugs have become an important design element. They help to distinguish different spaces within the same larger room. But are there any faux-pas you should avoid when selecting rugs for an open floor plan?

“Remember that color is the unifying element,” says Strangis. “So if you have a living room open to a dining area, and you need rugs in both areas, you want to stay in the same general design character and to choose rugs with similar coloring. In other words, don’t select an ornate Oriental rug in the living room and then a tribal Tibetan rug in the adjacent dining room.”

It’s not impossible to play with different colors, textures or design styles in an open floor plan, though. If you do want two very different rugs incorporated into your house, consider putting one of them in a bedroom or study. Make sure each distinct style is separated by a wall or door.

Help! All my rugs are too small!

It’s common for people to move into larger homes and find that their previous rugs are too small for their new space. In that case, should they scrap the rugs altogether in the short-term, rather than putting a too-small rug in a larger room?

“It might be possible to change the placement of a too-small rug to make it work for a new, larger room,” says Strangis. “You could try putting the rug under and in front of a credenza or chest, instead of under the main seating area. But if you find that doesn’t work, it probably is better to exclude the rug until you can buy one that properly fits the space.”

Still not sure? Tape it out

If you’re still struggling with rug size selection, Strangis recommends this low-budget experiment:

“Get a roll of masking tape or painter’s tape and tape off the different sizes of rug you’re considering. This works best if you have the furniture in the room, so you can get a better sense of how it will all fit. But it can work in an empty room, too — a too-small rug will be pretty obvious.”

The last word of advice from Strangis is that if you’re in doubt, size up. A too-small rug will likely always look wrong, but a rug that’s just slightly bigger than needed will blend into the space over time.

Need to stage your home?

The right size rugs can help your home shine for buyers! Get in touch today to learn more about the benefits of staging and styling before a home goes on the market.

How do I know it’s the right time to refinance?

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Key insights:

  • As rates continue to drop, more and more borrowers are refinancing in 2019.
  • The average refinancer in June 2019 saved $171 a month after they refinanced their existing mortgage.
  • Everyone’s finances and loan terms are different, but there are simple charts that can help you determine if refinancing could be a smart move.

Why are homeowners refinancing in 2019?

Feel like everyone is talking about refinancing their mortgage? You’re not imagining it — as mortgage interest rates have continued to dip lower and lower, many homeowners are finding that they can save money by refinancing their mortgage to lower their interest rate.

But just how much is everyone saving? According to stats from the Mortgage Bankers Association, the typical refinancer in June 2019 saved $171 a month after refinancing their mortgage. (Get the details on their math here.) And since this article posted, rates were reduced even further, offering the potential for even greater savings.

Sounds pretty great, right? We think so, too. Let’s dive deeper into the numbers to help you assess if refinancing is right for you.

I bought when rates were low. Should I refinance?

Rates have been quite low over the last few years, so many recent buyers may wonder if refinancing will really help them. And while this is a better question for your mortgage consultant, who can evaluate your exact loan terms and finances, we can offer a bit of data to help guide you. (Reach out to get help finding the right mortgage consultant for you!)

This is what you should know: If 2018 was a good year for mortgage borrowers, 2019 has been a great year. Freddie Mac stats show that in 2018, the average interest rate for a 30-year fixed mortgage was 4.54%; as of August 1, 2019, rates for the same mortgage averaged 3.75%.

That means that even if you got the lowest rate when you bought last year, refinancing to a currently lower rate may save you money over time.

Wondering what your monthly payments could look like? Check below to find a mortgage loan amount comparable to yours, then compare how different interest rates affect what you owe in monthly principal and interest.

Note that green cells represent the average interest rate for 2018; cells in yellow represent the August 1, 2019 average of 3.75%.

Monthly Principal and Interest Payment1

Loan Amount

3.75%

4.000%

4.250%

4.500%

4.750%

5.00%

$250,000

$1,158

$1,194

$1,230

$1,267

$1,304

$1,342

$300,000

$1,389

$1,432

$1,476

$1,520

$1,565

$1,610

$350,000

$1,621

$1,671

$1,722

$1,773

1,826

$1,879

$400,000

$1,852

$1,910

$1,968

$2,027

$2,087

$2,147

What are my refinancing options?

Everyone has the same primary motivation when refinancing: to pay less in interest. But keep in mind that there are a few different ways to refinance, depending on your current financial situation.

Pay it off at the same pace. You don’t have to start fresh with another 30-year mortgage. If you’ve been in your home seven years, for example, you can request a 23-year loan. In the end, you’ll still pay off your loan in 30 total years. With a lower interest rate on your 23-year mortgage, you can either pay less each month or keep your payment the same to get ahead of your payment schedule.

Pay it off faster. When refinancing, you can also switch to a 15 or 20-year loan term. This will typically increase the amount due on the principal each month, but you’ll pay much less in interest over time.

If your primary goal is to lower your monthly payment, you can also restart your 30-year term. You may benefit from a lower monthly payment and lower interest rates, too. Over time, you can use the savings to help fund retirement or school tuition, or you can overpay your mortgage each month to get ahead of your payoff schedule.

How do I know if it’s the right time to refinance?

Your finances are as unique as your fingerprints, so the best way to know if you should refinance is to speak with a mortgage consultant about your current loan and rate, current and long-term financial goals, how long you plan to remain in your home and the best path forward for you.

Keep in mind, though, that the typical refinancer (as of June 2019) is saving more than $150 a month due to today’s low rates. They may not last forever so if you have a higher rate than what is offered today, be sure to reach out and we can get you on the path to refinancing with a certified mortgage consultant.

1. Mortgage amounts are based on 30-year fixed rate conforming loans with a 20% down payment. Interest rates are based on current market conditions, 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.
Examples are provided for educational and illustrative purposes only. The payment amounts do not include homeowners insurance or property taxes, which must be paid in addition to your loan payment. Your actual payment may be higher. This is an illustration and does not reflect your actual loan information, cost or the exact interest rate for which you may qualify. Please contact us for current interest rates. Your loan’s interest rate will depend upon the specific characteristics of the loan transaction and your credit profile up to the time of closing. 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. Speak with your mortgage consultant for more information regarding the content contained on this page.
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. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in AL, AR, AZ, CO, CT, DC, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, WA, WI, WV and WY.
NMLS #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/)
©2019 Prosperity Home Mortgage, LLC dba Edina Realty Mortgage. All Rights Reserved.

How to help elderly parents downsize or stay in their homes

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Key insights:

  • As parents and relatives age and become less independent, it’s important to proactively discuss their future living arrangements.
  • While decisions about aging can be emotionally taxing, removing some of the logistical concerns can help minimize the overall stress.
  • It may be important to set up a Power of Attorney (POA), which names a designated decision-maker in the event that your parent is unable to make their own choices.

Aging is hard on everyone, and there is perhaps nothing more stressful than trying to navigate the long-term living arrangements of your parents or other aging relatives and friends as they grow older and less independent. Whether you’re in the early stages or need to make decisions fast, here is a quick primer on how to legally navigate their living arrangements as they age.

Aging in place: Avoiding probate

If your parents plan to stay in their current residence, you may want to have an open conversation about what will happen to their house after they pass. Most couples own their home as “joint tenants,” which means that if one dies, the other spouse automatically has full ownership of the house. If the surviving spouse dies, transferring the house to an heir or selling it to someone might require going through probate, which can be a lengthy court process. There are ways to avoid probate. A common way is to create a trust and to transfer ownership of the house to the trust.

If your parents know who they want to have control over the property, then they might want to consider a Transfer on Death Deed. A Transfer on Death Deed automatically transfers the property to the chosen recipient and does not require them to go through probate to do it.

It’s important to note that in a Transfer on Death Deed:

  • The owner of the property can revoke the deed at any time prior to their death
  • The heirs have zero claim over the property while the current owner is still alive

In other words, it’s a straightforward, flexible document that could save everyone a lot of headaches in the long run. If you know your parents mean for you (or other siblings or heirs) to inherit the property after they pass, you may want to discuss setting up the deed with them.

Avoiding probate will be helpful, but there will still be complicated decisions regarding the home, especially if there are multiple heirs. Your entire family may find it helpful to set up a Power of Attorney document so that everyone knows who will sign legal papers and make final decisions when necessary. You may also want to contact an estate attorney to make sure all the bases are covered.

Moving on, on their own

If your parents are ready to move out and they want to handle the logistics of hiring a REALTOR® on their own, your role may be more supportive. Offer to help them get rid of the decades’ worth of belongings and to clean up the house before listing. Be sure to block off several days surrounding the move to help with the physical, last-minute logistics.

Of course, it’s possible that the decluttering is beyond what you can reasonably do without professional help. In that case, there are junk removal services that will do the work for you by clearing out boxes, appliances, mattresses and any other cumbersome items clogging up storage areas. Check out services like Junk King or 1-800-GOT-JUNK for help.

If they’re moving to a retirement community or another residence with a smaller footprint, there are services that can help them select important belongings to keep. Senior moving specialists like the folks at Gentle Transitions can pack their belongings up safely and set them up at their new residence so they can immediately move into a place they recognize as home.

Moving on, but in need of aid

If your parents or relatives are ready to move from their home but are unable to handle the logistics, it’s a smart time to set up a Power of Attorney (POA). A POA is a legal document that designates an adult to make decisions on behalf of another adult; these decisions can include financial decisions like selling a property. If the POA is “durable,” the authority to make decisions continues even if your parents are no longer competent to make decisions on their own.

It’s advised that the POA be granted to someone who is close enough to the individual that they can make informed, sensitive decisions about what is best for them. In some cases, the individual’s adult child may be the right choice for a POA and in others, it may be best for the POA to be a more distant relation or a family friend.

Setting up a Power of Attorney in Wisconsin or Minnesota
Each state has its own requirements for POAs and many have specific forms mandated by statute.

These forms must be signed in front of a notary public. It’s critical that the individual requesting the POA is of sound mind to consent; if they are deemed unable to consent, then the POA cannot be put into place.

Once the POA is in place, the newly designated POA can work with the individual to determine:

  • A moving timeline
  • The right Realtor for the job
  • Logistics, including decluttering or using a junk removal service
  • Their future residence

If your parents are unable to make decisions on their own

If your parent is not competent and has not given you POA, you can apply to the court for guardianship or conservatorship. If granted, you’ll be able to make decisions about their life and finances, including their property and possessions. This can be a painful and time-consuming process, so it’s best to get POA set up before you need to go down this path.

Need help navigating this tricky path?

We’d be honored to serve you as you work to respectfully transition your parents or other aging relatives. Get in touch any time for help, insights and resources.

Porches, basements, attics: What counts as finished square footage?

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Key Insights

  • Learn the four criteria a space needs to be considered finished square footage.
  • See why typical attics won’t count toward square footage, but a four-season porch or basement bedroom will.
  • When in doubt, refer to MLS information, your purchase agreement or your own measurements.

When buying a home, it can be tricky to know what counts as square footage and what doesn’t. For example, two similar-style homes on the same street could vary significantly in price and square footage depending on how they’ve been updated or maintained over the years.

As you search for homes, here are insights you can use to determine what actually counts as “finished square footage.”

Square footage and the MLS

One way to find out more information about a home you’re interested in, including square footage, is through information from the Multiple Listing Service (MLS). The MLS is a service real estate agents use to publish their active property listings so that consumers and agents can search for-sale homes and view them online.

Each MLS has different rules on how to report and what constitutes finished square footage, but they all seek to standardize housing data so that you have the most accurate information and can trust the listings you find online.

What counts as finished square footage?

To count as finished square footage, the space typically must have these four attributes:

  1. Flooring
  2. Wallcovering
  3. Ceiling
  4. Ability to be lived in 365 days a year (for example, it must be heated in the winter)

How do agents calculate square footage?

This is a great question and the not-so-great answer is, it depends on the listing agent.

In many cases — and this is often said to be the “right” way to measure — the agent may start by measuring around the outside base of the house. Using that foundation size, the agent can calculate the total square footage. In other words, for a symmetrical two-story home, they could double that square footage number to get the total finished square footage for both levels (deducting any space that is left unfinished).

In some cases, a listing agent may go from room to room, calculating the exact square footage of each space that meets the criteria. From there, the agent would add up the square footage to present a precise total in the home’s listing.

And sometimes, agents might rely on government records or past MLS listings for information. This can lead to inaccuracies in the reported square footage, as the homeowner may have finished a basement, attic or enclosed and heated a three-season porch to enjoy year-round in the time since the records were last updated.

When in doubt, it’s okay to ask the listing agent how the square footage was calculated. And buyers are welcome to bring their own measuring devices along if they want to be sure they agree with what has been calculated and published.

When does a basement count as finished square footage?

Does the basement have a finished floor, wall covering, ceiling and heat? If so, then its square footage might be included in the total finished square footage of the house.

NorthstarMLS (the MLS for the Twin Cities and surrounding regions) identifies both above-ground and below-ground square footage as separate numbers and as a total sum in finished square footage. Keep in mind, some MLS guidelines don’t include below-ground square footage at all, even if the space is fully functional. If you’re in doubt, ask the listing agent what rooms and floors were included in their calculation.

What about basement bedrooms?

Again, as long as the basement bedroom meets the square footage requirements (walls, flooring, ceiling and heat) it will contribute toward the total square footage of the home.

However, just because a basement bedroom is included in square footage does not necessarily indicate that it’s also represented in the number of bedrooms.

Generally speaking, the room must meet the city’s requirements for a bedroom in order to be called a “bedroom” in the property listing. For a basement bedroom, that would typically require an egress window, in addition to the square footage requirements.

When does an attic count as finished square footage?

Some people wonder if an attic can be included in the finished square footage of a home if there is a pull-down ladder or existing stairway to the space. To be included in the square footage, an attic would first need to meet the same criteria as any other space — heating, flooring, ceiling and wall covering.

But what about non-traditional floor plans, like a 1.5-story layout common in older homes? Or a four-level split floor plan? The second level of a 1.5-story home often can be included in the finished square footage count, but only if the ceilings are of sufficient height. For example, in some MLSs the ceiling must be at least seven feet at the highest point. Spaces where the ceiling is less than five feet tall must be excluded entirely from square footage.

Do “four-season” porches count?

To be counted as finished square footage, a porch must be four-season. A four-season porch is much like any other room in the house, except that it provides clear views of the outdoors all year through a variety of windows. Four-season porches must have permanent heat sources to be included in a home’s finished square footage.

If a porch isn’t heated or only has screens (with no glass windows), then it is not part of the finished square footage count.

What about stairwells and closets?

Any space that has walls, flooring, ceiling and heat would count as finished square footage. So, it’s likely that stairwells, closets, walk-in pantries and other areas you might be questioning would contribute to the square footage count of a home.

What if I think a listing’s calculation is inaccurate?

Potential buyers should be aware that in both Minnesota and Wisconsin, the purchase agreement on a home notes that square footage measurements are approximate.

If concerned about inaccuracies, the buyer and their REALTOR® should:

  • Ask the listing agent for the exact way that the square footage was calculated.
  • Verify the information by taking their own measurements.

Do insurance agents calculate square footage the same way?

You may also wonder how square footage is calculated or used within a homeowner’s insurance policy. We reached out to Scott Teece, managing producer at Edina Realty Insurance, to get the details.

When creating an insurance quote for a client, Edina Realty Insurance typically pulls from the MLS listing to ensure they are assessing the same square footage as indicated in the property records. But while homebuyers care mostly about finished and unfinished square footage, insurance agents take special notice of a different breakout — above ground square footage and below ground square footage.

“When offering coverage to a homeowner, we calculate the total replacement cost of the property,” explains Teece. “Both above ground and below ground square footage are factored into that calculation, but the cost to replace the above ground square footage is typically somewhat higher. That’s because, for example, if a catastrophic event like a tornado or fire should occur, you’d likely have to reframe the first floor and above, but not the basement.”

In other words, a 2,000-square foot house without a basement would likely have a higher replacement cost than a home with 1,000 square feet of above-ground living space and a basement sized at 1,000 finished square feet.

When Teece and the Edina Realty Insurance team draw up a homeowner’s insurance quote, they rely on the MLS’ breakout of above ground square footage and below ground square footage to make their assessment.

Ready to purchase?

When it comes down to it, the square footage of a home is just a number. The most important things to consider when determining if the size of a house is right for you are:

  • If you feel comfortable in the space.
  • If the rooms can accommodate your needs.

But, if the numbers are important to you, call or email any time for additional help. We are available to help you measure or verify the square footage of for-sale homes — or to help analyze exactly how much space you’ll need in your future residence.

10 ways to be a good neighbor

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Key insights:

  • Introduce yourself early and work to remember their names for next time.
  • Ask them about the history of the neighborhood and what you should know as you settle in.
  • Avoid common issues like parking disputes and long-simmering disagreements that can be settled with respect and open lines of communication.

Just moved in, or got off on the wrong foot? Here are 10 ways to work toward a friendly relationship with even the trickiest neighbors.

1. Introduce yourself right away

You may get lucky and run into your next-door neighbors as they’re outside doing yard work or picking up their mail. But if you don’t see them within the first day or two after move-in, take the initiative to knock on their door and introduce yourself in person.

When it comes to neighbors further down the road, keep your eyes open for easy opportunities to connect. If a week or two passes and you want to knock on their doors as well, go for it!

Not great with names? Don't be afraid to ask their name again or clarify as you are ending the conversation. Once you get home, write it down so that you don’t have to ask again, or make a note in your phone.

2. Exchange contact information

As you meet your neighbors, ask for their contact information. Use casual methods like text or email if you drop off a piece of their mail or want to let them know you’ll have a house full of visitors in upcoming days. Be sure to speak face-to-face if you have more important matters to discuss (like a boundary issue, concerns with pets or noise complaints).

You can also ask if there is a neighborhood listserv or if your community is active on Nextdoor, a social media platform that’s neighborhood-specific.

3. Get their history and local insights

Anyone who’s been in the area longer than you will have plenty of fascinating information to share. Ask your neighbors how long they have lived in their house, what they love about the neighborhood and what they’ve seen change over the years. Plus, you can ask about specifics like:

  • The best local utility companies
  • Nearby parks, trails or favorite restaurants
  • Any city ordinances you should know about, like street parking and snow removal

4. Invite them over

Want to establish a friendly rapport? Consider hosting a small, casual breakfast or happy hour for your nearest neighbors. You can choose to invite them individually or together, depending on your space and scheduling.

And if you host an annual holiday party or any larger gatherings throughout the year, be sure to extend them an invite. Even if they don't come, they may be happy to know the date in advance so they aren't confused when the street fills up with cars.

5. Follow their lead, then set your own tone

Some may want to have longer conversations every time they see you, others may opt for a quick hello and wave. Be yourself, but don't force a dynamic.

And if you feel that you need a little less interaction, excuse yourself politely when you feel the conversation has run its course. After a few such exits, most people will pick up that you are not looking for long-winded dialogues.

6. Stay in your lane when parking

While street parking is public parking, some neighbors can get irked if the spots in front of their house are always full with someone else's vehicles. Try your best to park in your own zone and to have guests park there as well.

If you have more cars than you do driveway and garage space, do your best to park in front of your own place when possible, then change up your overflow parking spaces so no one feels permanently encroached upon.

7. Fight passive aggression

Long-simmering disputes between neighbors can become the stuff of legends, but they often begin with a small issue or nuisance that wasn't discussed openly and early. If you feel that your neighbor has become closed off or miffed at you, be sure to ask if you've done anything wrong.

You may not agree with their assessment and you may choose not to change your behavior. But when you know the issue, you can work toward a compromise or more open lines of communication in the future. A little self-reflection never hurts!

8. Play nice online

Remember when your mom said, “If you don’t have anything nice to say, don’t say it at all?” Well, that goes double now that everyone has instant access to online gripe forums that can be screenshotted and shared to the wrong party.

Be sure not to hide behind your computer if you have issues that need reconciling. Whether you are Facebook friends with neighbors or active on local social media sites like Nextdoor, news of your online complaints could travel swiftly or be misconstrued.

9. Be a “joiner”

Join the neighborhood watch group or ask the local block captain if they need help with anything. Most neighborhood organizations are kept up by the same folks for years or even decades and they’re almost always looking for new neighbors who are willing to pitch in.

10. Be proactive

As you get to know your neighbors better, watch for easy ways you can help them out. If an older neighbor undergoes surgery, mow their lawn until they’re back on their feet. If a family has a baby, offer to drop a meal off on their doorstep as they’re settling into their new normal.

If you know that a neighbor goes out of town for a week in June, ask if you can bring in their mail and water their flowers while they’re away. Chances are, they’ll return the favor when it’s your turn to travel! It never hurts to have somebody in the neighborhood keeping an eye on your home when you can’t be there.

Community begins with you

Whether you move into a neighborhood that’s bustling with activities or an area that’s a little more closed off, take the initiative to get the friendly vibes flowing. Everyone benefits when neighbors work together and look out for one another.

Looking for the right community to call home? Get in touch if you’re ready to start neighborhood shopping.

Your starter lake home: How to save money on your first waterfront property

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Key insights:

  • When looking for a lake home, consider whether or not you need to be on the water. A lake access home could be a viable — and cheaper — option for your family.
  • Think “cabin” instead of “lake home.” By broadening your own criteria, you may find more options (and more affordable options, too).
  • Purchasing a property on a budget might force you to get creative, especially when it comes to hosting guests. A bunkhouse or closet full of air mattresses might become part of your lake home checklist.

When living in our neck of the woods, escaping to a lake home is the epitome of summertime fun. And while plenty of retirees are cabin-bound on the weekends, not everyone wants to wait for retirement to enjoy days at the lake!

Luckily, affordable lake home properties do exist. These houses can be the perfect stepping stone to owning a larger lake home down the road. Here are some insights you can use when finding the perfect first lake home for you and your family.

Lakeshore vs. lake access

There’s no doubt that the sandy beach that comes with a lakeshore home is wonderful. But do you plan to spend time on the beach or on the water? If you enjoy fishing, canoeing, speed boating or jet skiing at your lake property, you might not use the beach that much (or at all). In this case, consider a home with lake access.

A lakeshore home is situated directly on the water, whereas for a lake access property, someone else will own property between yours and the water (but it still offers access to all of the recreation). Some lakes even offer public beaches that can suit your sand castle-building and sunbathing needs just fine.

For the right buyer, lake access homes can be quite practical — and they tend to be cheaper, too!

Note: When you’re searching for lake homes online, it can be confusing to know if you’re looking at lakeshore or lake access properties. Together, we’ll make sure you set the right parameters and understand the scope of each property.

Have you considered a trailer?

When you hear the word “trailer,” it might come with a bad rap or images of rundown properties. But trailers are just as varied as more traditional properties and they can be a terrific option for first-time lakeshore homebuyers. There are retro chic trailers, newer models with all the bells and whistles and everything in between.

Think about it this way: A trailer is not all that different than a tiny house. And the rise of the tiny house trend is undeniable — HGTV talks about them nonstop and there are plenty of Pinterest boards to attest to their popularity and appeal.

By changing your viewpoint, you may just open a new door to plenty of low-cost and even lower maintenance lake homes (Pssst: This might also offer a temporary solution until you decide to build something more permanent). Want family to be able to visit? The lot may have space for tents and campers--consider the lot size and flexibility.

What about a cabin?

Maybe we’re just splitting hairs here, but it can be helpful to re-frame any preconceived ideas you may have when it comes to “lake home” versus “cabin.” By keeping an open mind to cabin-style lakefront options, you may find a benefit to a smaller footprint and lower cost.

Some cabins have more dedicated purposes, such as a hunting retreat, overnight fishing house or summer-only getaway. But even the smallest cottage can be made into the perfect retreat or updated into a cute, year-round lake property over time, if that’s what you’re looking for.

When searching for a property on the lake, be sure to consider the potential of rustic-style cabins. By leaning into the knotty pine walls and cozy quarters, you can design an on-budget, unforgettable space filled with warm memories.

How to accommodate house guests at your lake property

Oftentimes, lake home buyers want to be able to host their large families, but they quickly realize that multi-bedroom lake houses are out of their budget. In that case, remind yourself that what’s really important is that you’re all together — and it’s okay to get creative with guest accommodations.

When looking at potential lake properties, prioritize homes that have enough bedrooms or sleeping space for your immediate family. Then, consider alternative sleeping options for visiting friends and additional family members.

Maybe your kids can pitch a tent for a fun night camping under the stars or you can ask folks to drive their RVs up to park on your lake property. In addition, make sure every sofa folds out into a bed, and keep air mattresses and extra sheet sets stored in your closets. You could even consider building a bunkhouse!

The possibilities are endless when it comes to hosting guests. Plus, the truth is that your family and friends just want to spend time together; it’s unlikely that they are expecting (or demanding) five-star sleeping accommodations.

Jump into your waterfront home

Affordable lake properties are out there! If you’re ready to begin your search for the perfect lake house, reach out any time to get started. Let’s make those weekend getaways at the lake home and bonfire-filled cabin nights come true.

For more tips on buying a home, follow #BuyerInsights on Facebook, Twitter, YouTube and Instagram.

Selling? Three small projects to win buyers over (and three resale killers)

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Key insights:

  • Understand what homebuyers want and capitalize on the three easiest upgrades.
  • Design a laundry space that someone would actually want to spend time in, through wall colors and storage (and yes, you can even do this in the basement).
  • The exterior of your home is just as critical as the interior features. Don’t ignore the impact that curb appeal could have on your home sale.

You can only sell your property once, which is why we aim to set sellers up for success the first time around. By following these three projects — and avoiding three common seller pitfalls — you’ll set yourself up for a profitable property listing that’s attractive to homebuyers.

Three can’t-miss projects for sellers

The National Association of Home Builders (NAHB) recently conducted a report titled What Home Buyers Want. This study aims to understand how we can best list our homes for sale with the interests of homebuyers in mind.

Here are the three easy additions that you can make to your home to enhance your space before listing your house on the market.

1. Install a ceiling fan

As homeowners in the Midwest, our houses must be prepared for chilly winter temperatures along with hot (and sometimes muggy) summers. One way to find comfort in these extreme climates is through ceiling fans — and homebuyers know it, too! Eighty-five percent of homebuyers want ceiling fans, according to the NAHB study.

In fact, the U.S. Department of Energy states that using a ceiling fan “will allow you to raise the thermostat setting about 4°F with no reduction in comfort.” Ultimately, this can decrease your air conditioning bill and save you money in the summer months. Plus, in winter months, fans can help distribute heat throughout a room, once again making your home cozier.

So, whether you give interested homebuyers the logistical pitch of why a ceiling fan is a smart decision for them, or they simply enjoy the aesthetic of having a built-in fan over a standing plug-in version, a ceiling fan is a simple step you can take to upgrade your home prior to selling.

2. Create a dedicated laundry space

Homebuyers crave functional spaces, so is it any surprise that 91% of homebuyers want a dedicated laundry room?

Now, we aren’t just talking about stacking a washer and dryer in the basement. It’s important to thoughtfully design an area of the home that’s dedicated to washing, drying, hanging and organizing clothes. Consider painting your laundry room (or laundry area) a calm, refreshing color like a pale blue or soft grey. You can also add shelving to the laundry area to make the space more practical, even if it is in the basement.

Want to take it up a notch? Add art to the walls, rugs to the floors and attractive canisters to collect lost buttons, spare change and more.

3. Stock up on garage storage

The garage is an area of the home that can be overlooked. However, by amping up this room, you’ll drum up a lot of homebuyer interest. Roughly 85 percent of buyers want garage storage space, not just a large, empty carport.

To give your garage a boost, add these storage elements:

  • Permanent wall shelves
  • Storage racks in the rafters
  • Rake hooks
  • Organizational cubbies or cabinets
  • Built-in tool storage

Avoid these three home resale killers

On the other hand, there are some things that could decrease your ability to sell your home — or prevent you from getting top dollar for your property. If you’re hoping to have a favorable sale, avoid these three home resale killers at all costs.

1. Don’t defer maintenance

When selling your home, you’ll want to make sure that everything is in tip-top shape come sale time. So, you don’t want to defer any maintenance. Glance over every room with inspection eyes and begin to focus on the most obvious issues in your home. If you see peeling paint, old windows or broken outlet covers, it’s time to make some changes.

By ensuring that even the smallest details are ready to go, you’ll create a more attractive listing for interested buyers. Not sure what to look for? An agent with fresh eyes can help you identify the must-fix elements within your space.

2. Stop ignoring curb appeal

Getting your home to stand out online and in person is essential for a prosperous home sale. One thing that you can’t do is ignore curb appeal. To increase your chances at having your home shine through a list of competitors, brighten your home’s exterior with great landscaping and potted plants, flowers or other colorful accents.

3. Reconsider staging your home

Sometimes, home sellers leave up their family photos and unique decor pieces when listing their properties on the market. Although you may want to showcase pictures of your loved ones, you have an affinity for retro furniture or you use a room for something other than its traditional use (hint: the second bedroom you’re using as your spare closet could send the wrong message), it’s important to keep things neutral when putting your home up for sale.

Rather than sticking with your individual design style, opt to stage your home for sale. Staging is when you neutralize your home (in both design and function) and use new or rented furniture or decor to bring out its best features and appeal to the masses. By working with a professional stager to go back to the basics, your house will be optimized with a home sale strategy that works.

Ready to sell?

By following these tips, you’ll be well on your way to a successful home sale. Be sure to consider these simple projects when selling, and get in touch if you have other questions about preparing your home for the market.

For more seller tips, follow #SellerInsights on Facebook, Twitter, YouTube and Instagram.

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