With 20+ years in Real Estate and additional experience with Relocation clients, I am gifted in helping people save money while getting into a property they love at the best possible price with savings in all categories from choosing the right lender, choosing the right inspector, and closer, as well as the right options to help when fixing up your new home. Reach out with your questions and I will be happy to help you get started.
Homebuyer Tips in a Tight Market
Taking the risk to forego, inspection contingency on an offer is a strategy many buyers are using now, due to low inventory, and more buyers competing for the small amount of listings available. Because this market is ridiculously competitive, with 20+ offers on many properties, many offers have been written to exclude an inspection contingency and buyers are offering well over list price as well as meeting any appraisal gap.
Typically all offers occur within 48-72 hours once a listing goes active, giving the Buyer very little time to make decisions. Sometimes the Sellers Disclosure form is only updated to the listing shortly prior to it going active so Buyers have little time to assess a home in advance of writing an offer.
Cash is still king if your offer is high enough, and, you make inspection non-contingent or forego one altogether. So, how can buyers have some peace of mind regarding the homes they are viewing?
Some buyers have chosen to use an inspector’s walk-through consultation. Many inspection companies offer them, they typically charge a fee for each home but decrease the cost after the first one as long as homes are close together and driving distances in not an issue. A walk-through consultation typically lasts 30 minutes, and, the only tool the inspector will bring is a flashlight.
The realtor and clients must be present during this consultation which occurs during their 30 minute showing, and, is typically the maximum amount of time for each consultation. No report is sent afterward, no photos are taken, but, as much of the home as possible is covered in that 30 minute period.
Items that the consulting inspector will look for include: foundation issues, wet basement, evidence of water in ceiling or under/around baths and kitchens, plumbing, neglected furnace/boiler, electrical hazards, old knob and tube wiring, potential water-intrusion rot near windows/doors, proper drainage – gutters & downspouts, an exterior review, and much more.
It is typically not possible to do a thorough investigation of all components, and, during Winter, the roof may not be visible enough to gauge remaining life expectancy of roof, but, a non-contingent home inspection can be accepted by sellers, offering a more detailed inspection once a Purchase Agreement has been accepted by the seller.
In this fast-moving market, inspectors try to stay flexible to accommodate these showings, although they may not always be able to do so. Pricing may start at $200 for the first walk-through and might decrease depending on how close the next listings are in the showing tour. Every company has different rates and you will need to schedule showings in advance.
We try to help our Clients strategize their search in such markets as we are experiencing currently, it is definitely a Sellers Market, so, buyers need to take advantage of any tools available to make this market work for them.
Despite offers of as much as $90,000 over list price, some clients still are losing to offers with no inspection contingency. So, at some point, it might prove wiser to forego inspection contingency at least until the market shifts or more inventory comes on the market to lessen the amount of competition.
Buyers without deep pockets are being priced out of the market at this time if they don’t have sufficient cash to bring to the closing table, especially if the appraisal comes in low and seller refuses to negotiate price.
Many sellers are asking for confirmation by buyers of their ability to meet an appraisal gap. Sellers have most of the leverage at this time and they are taking full advantage of this market.
Written by Claire Bastien for www.BuyersRealEstateGroup.com
How Smart Homeowners Budget Renovation Costs
Last year in 2021 we saw product shortages for consumers in general, however, none was more problematic than the home building & remodeling supply and material shortages across all areas of renovation and construction. Budgeting for new construction and renovation projects has become unpredictable, and, many builders and homeowners have sticker shock, and are having to make substitutions to finish their projects. Builders took to bulk buying for new projects and restricted some choices to new buyers based on their available material supply.
Many Homeowners typically underestimate costs, HomeAdvisor has found when they surveyed over 900 consumers. Their consumer study found homeowners often underestimated interior paint costs by 50%. DIY costs will differ proportionally in price from professional costs so, plan on getting multiple estimates to stay on budget.
In early 2021, married clients purchased a new townhome from an independent local builder. During construction, due to a drywall shortage, the builder substituted a firewall material in place of the typical drywall so as not to hold up the project. The next portion of the new construction project went up $50,000 in price, per unit, due to the unpredictability of supplies & material.
On the same townhome, a gas insert was ordered as part of the sale, however, a week prior to closing there still was no fireplace delivery, and, the replacement fireplace took 4 months to finalize, as, people were unavailable to install or inspect, due to illness & quarantine, once a Covid diagnosis was made. While the property closed at the end of August, the fireplace wasn’t completely installed and finally approved until just prior to Christmas. The homeowners had to install a temporary lockbox on their door since neither of them could be home during weekdays.
When replacing flooring or painting, you will likely fare better. Just don’t get locked into one color choice, as some supplies may not be available in the quantity necessary to complete a project, forcing you to make a secondary choice, especially with countertops, flooring or tile. Get professional estimates before you order and make sure you can get sufficient materials in the same color lot so as not to run out prior to finishing the work. Always get some advice on ordering if you have a running or repeating pattern as well.
The most underestimated costs are landscaping costs, according to their survey. 25% of those surveyed admitted they had underestimated their landscaping costs by 67%. Landscaping materials can easily add up, as, a single tree can cost between $150-$300, while, the price per tree may decrease if multiple trees are being planted. Getting professional estimates from the start will help you consider all necessary costs and make realistic choices in your landscape budget.
Another area where, on average, 40% or more homeowners typically underestimate the cost, is window installation. In Minnesota, where Winters and Summers can really stress your heating and cooling budget, it’s smart to have energy efficient windows. More homeowners have chosen to upgrade windows in 2021 and, as a result, costs have risen 5-10% because of the higher demand.
In 2020, during a repair job, a window was ordered by a professional installer for a homeowner in mid-August, but, due to delays in product availability, the window wasn’t delivered and installed until November the same year. Our best advice is to plan way in advance when ordering new windows, get pricing nailed down early, and, anticipate delays in the process just in case.
When setting a budget for any project, homeowners should budget higher than anticipated to avoid cost overruns. Material prices rose between 5-10% in 2021 for roofing, siding, installation, window installation and more. It is smart when estimating costs for supplies and installation to add a pad of 5-10% to initial project estimates to offset future price fluctuations.
For first-time homeowners, if you are taking on larger projects, be sure to follow all city and county codes for renovation. Don’t assume that by watching a DIY series you have seen all potential issues and solutions. Unwelcome surprises are very common, so, think twice if you are unsure and contact a professional. It is better to be safe than sorry and really overrun your budget.
Written by Claire Bastien for FindYourMinnesotaHome.com
Happiest of New Years to You!
Merry Christmas and the Happiest of New Years to all our clients, readers and all your family and friends. Wishing you a Peaceful, Healthy and Abundant New Year!
How to Manage Moisture in the Home
As the holidays approach, with all the holiday prep, it’s important to be mindful of the air in the home, and moisture available in the air. Unlike the Spring, Summer and Fall, when we might open our doors and windows to allow more air and exterior humidity in the home, during Winter months we typically keep the home tightly closed to reduce heat loss.
Unless we take steps, this can have a tendency to create a potential for moisture buildup, especially where we might not be able to easily control it. Monitoring the situation to ensure this doesn’t happen will keep your air moisture regulated during the dryer colder weather.
There are over 10,000 types of mold that can be present in the air, and most require moisture above 50% in the air to thrive, so, it’s important to maintain control of the levels and location of moisture in the home.
Minnesota homes typically have basements, and, since MN is well known for having high Summer humidity levels, many home inspectors recommend a dehumidifier in every basement to cut down on mold potentials. Also, inspectors typically suggest a dehumidifier is kept running all year long and regularly emptied.
During Summer we typically also use the air conditioning system to manage the humidity level, whereas in Winter, humidity can come from washing clothes, taking baths or showers as well as cooking. Anywhere that condensation can form around those areas of your home should be monitored to cut down on condensation, which could potentially be a site for mold buildup.
Some homes have in-furnace humidifiers meant to balance out the humidity in the interior air to prevent the home being too dry, however, most home inspectors will recommend you shut this function off and not use it, because most homeowners do not properly monitor the humidity levels, or, change the level of humidity required as the temperature fluctuates.
Windows and walls are susceptible to condensation, and, it is important to ensure this doesn’t become an ongoing issue. Where you notice consistent buildup of condensation on windows, it’s important to correct, monitor and prevent future occurrences. Excessive moisture can damage or decay the woodwork, or, allow moisture to seep or migrate into the wall under the window creating a potential mold situation that can’t be seen visually on the wall.
Potential areas where condensation could become a bigger issue is the exhaust fan from the bathrooms, especially if the exhaust is pushed directly into the attic. Bathroom vents, if not vented properly to the roof and outside the home, can cause bigger issues. Mold can grow in the insulation, on the wooden studs, timbers and on roof decking if vents are not properly installed and sealed. This also applies to the laundry and kitchen area if not properly vented to the exterior of the house. Not all kitchens have exterior vents.
To ensure you home doesn’t have these types of issues, it’s key to keep the dew point low enough. To monitor this, you can purchase a humidistat for under $25.00 and test the air humidity to keep it at or around the preferred 20% level in the Winter and a safer 45%, or lower, during the Summer months. Using your dehumidifier all year long, or air conditioner during the high humidity months, will help you maintain correct levels of humidity.
To keep an eye on the situation as you use different areas of the home, and ensure the humidity is kept low, the following suggestions will help you take control of this and keeping consistent will cut down on mold potential.
In Winter, keeping the curtains and/or shades open during the day will allow the humidity to dry around windows. Keep bathroom fans on after baths or showers for at least 45 minutes to get rid of all excess moisture. Check the attic to make sure your bathroom vents out to the exterior, not just to the attic, and check for any potential mold or moisture around roof vent seals to ensure there is no sign of condensation. Proper venting of kitchens, laundries, and bathrooms is essential.
Keeping the kitchen fan on while cooking on stovetops, if the fan vents to the outside, is also smart. When boiling liquids generates a lot of steam, this can create condensation. Some older kitchens have vent fans in the ceiling, others might have it above the stove hidden in a cabinet, either way, it’s important to leave it on during cooking so steam escapes to the exterior of the home.
It’s also smart to regularly check for any potential leaky faucets, looking under sinks and tubs to ensure that no leaks are occurring, and, if leaks are found they should be fixed as soon as possible.
One of our past clients noticed a bad odor coming from an unused bathroom and finally checked under the sink to identify the source of the smell. They were shocked to find mold growing on every surface inside the cabinet. The entire cabinet and wall area was removed by mold remediation, as well as all the flooring. All new flooring, drywall, cabinet and sink were installed after air quality checks to ensure no further mold issues could be present.
Monitoring these potential issues is the best way to prevent them and save you money in the long run, keeping your home healthier for you all.
Written by Claire Bastien for FindYourMinnesotaHome.com
How Home Winterizing Can Save you Money
Keeping your home warm, dry and free of pests over Winter will help you save money on future repairs and energy bills, however, this requires some regular maintenance.
Making any necessary changes or repairs in the Fall can really impact your energy bills and ensure that your home is protected from unwanted moisture, heat loss or intrusions by pests. The first place to start is with unwanted moisture.
- Keeping your foundation drainage at the proper angle, 10 degree grade going from the house to about 6 ft out, is going to help prevent water entering the basement level. Make sure drain pipes extend far enough away from foundation to prevent water flowing near foundation. Make sure your drain pipes are firmly connected and made of solid metal, not plastic – which tends to crack and leak in Winter.
- Keeping your gutters clean and free of twigs, leaves or other debris will prevent the buildup of ice dams and keep water flowing to your downspouts and drain pipes. While you are up there looking at your gutters, you might consider getting gutter covers, to prevent you having to clear them constantly, and, while you are at it, check the soffit and fascia to ensure there are no holes critters could use to enter your home.
- Inspecting your roof while you are up on the ladder and performing any necessary repairs prior to the first snowfall will save you potential leaks into the attic as well. Replacing missing shingles or any shingles that are curling or cupping will ensure there are no gaps in your roof coverage.
- Repair any gaps in the foundation and get some appropriate caulk or foam to fill in any cracks to prevent loss of warm air, moisture or pet intrusion. Any good hardware or big home store will carry a variety of caulk and seal for different types of stucco, siding or wood to help you close those gaps. Expansion foam or the right caulk will help you close any holes and keep your home snug. Especially check for locations around the home with potential for pest intrusion, like front and rear steps and entryways, and use some expansion foam to close off gaps or small entry points.
- Seal doors and windows with appropriate caulk or silicone sealant to close any air gaps. Make sure there is no air loss around doors and windows.
- Chimneys often can develop a layer of creosote inside which needs to be cleaned if you plan on burning more fires over the Winter. Chimney fires are often a result of not cleaning out the old creosote. You cannot count on specialty logs, which claim to burn creosote, to fully prevent chimney issues. Checking your chimney will ensure it is still in working order as well. Some chimney issues can cost in the thousands, at which point it might make sense to install a gas insert rather than repair the chimney. A gas insert has its own chimney inserted, making repairs on the inside of the original chimney obsolete in some cases. Also, make sure the exterior of the chimney is in good shape as well, as, this will prevent animals from getting into the home.
- If you have an outdoor pool and you don’t drain the water, you will want to Winterize the pool to ensure you will have it to use again in the following Spring/Summer months. Clean the filter, replace the cover after doing any necessary water treatment and follow the installers guidelines. Make sure to check the cover to ensure no pests can enter.
- Make sure all the exterior vents have proper covers to allow for ventilation but also prevent pest intrusions. Most pests look for warm air entryways into a home and you will want to use a screen small enough to allow the flow of air and to prevent smaller critters from having access. Clean these screens to prevent a buildup, especially the dryer vent which tends to collect lint.
- All water hoses should be disconnected and drained and stored properly. Turn off water to all exterior hoses and drain them to be sure they won’t freeze and burst water pipes during Winter. If possible, install a freeze proof water faucet on the exterior
- Plants and shrubs vulnerable to the Winter blasts should be wrapped or covered with some type of covering, such as Burlap, to prevent the loss of expensive landscape plantings, as this will give them a warmer layer to buffer them throughout the cold weather season.
- Cut back or prune any trees, shrubs and hedges during the Fall, especially any plants touching the home or roof as this is best done in the Fall or early Spring before the branches can sprout again. Keeping plants from touching siding or roofs can extend their life.
- Properly store all yard accessories and cover or store lawn furniture to extend their life. Store hoses and tools away from the weather and winterize any gas-powered tools.
- Check your attic to make sure you have tight seals to the vents from kitchen and baths to your roof, and, ensure you have sufficient amount of batting or insulation material.
- Replace old furnace filter and have extras on hand to change appropriately.
Most hardware or large home stores have supplies and great options for helping you to keep your home maintained at any season. Taking the time to do these fixes and maintenance items can save you time, trouble and money in the long run.
Written by Claire Bastien for FindYourMinnesotaHome 2021
Helping Buyers Identify Possible Foundation Issues
When viewing properties, the foundation is the key issue to check to ensure that the home is well maintained and unlikely to fail due to structural problems. If possible, the foundation should be viewed from both the interior and the exterior to assess any potential for necessary repairs. Foundation repairs can be costly if left unaddressed.
Some homes have critical damage and the repairs could reach tens of thousands of dollars. Often the exterior of the foundation has been covered by landscaping or other patching that is intended to hide previous repairs from view. It’s important to keep an eye out for the signs of issues.
When checking the landscaping and foundation of a home, look for whether or not a home has a 10-degree drop away from the foundation in the landscaping to allow for appropriate water runoff and ensure that gutters and appropriate downspouts and drain extensions are directing water away from the foundation. Water is not the friend of your foundation, and, repeated water damage can seep into the lower level causing degradation to the foundation and potential water-related issues in the basement level such as mold.
Signs of this might include foundation mineral efflorescence on exterior or interior of basement foundation brick, cracking or degradation of brick, and stains from previous water intrusion. This is easiest to view on an unfinished basement.
If you purchase a home where the landscaping is flat, you may want to improve this by adding soil to create the 10-degree water drop away from foundation, ensure you always have clean gutters and appropriate downspouts and extensions draining water sufficiently far away from the home. These fixes are cheap in comparison to the bill for foundation repair, so, it’s important to keep those maintained.
You want to avoid diverting your water runoff toward a neighbor’s home and ensure that the runoff is being directed to a garden away from the foundation or to the city clean water sewer. Some people create water gardens to allow some plants to thrive if you have areas where water typically collects.
Check for potential cracks, either lateral, especially bulges or separations, or step-cracking in the foundation brick or any covering such as stucco or paint on the exterior foundation. On the inside of the home, any hairline cracks should be monitored, you want to make repairs to those if you could slide a credit card or something larger into the crack. If they get larger you should consult an engineer.
Any lateral issues, especially bulging, diagonal or step cracking issues should be examined by a foundation expert, like a structural engineer, to make sure there is no issue acting on the foundation that will degrade further over time.
Because land can move over time, if the foundation is not stable the entire home could see potential for destabilization. Look for large cracks in the basement floor, garage foundation or floor – as they are typically exposed more than some basement foundations. A telltale sign of potential issues could be that a former or current owner set up temporary supports in the basement.
Foundation engineering firms and structural engineers should be called in to assess the situation and determine the best fix to stop further progress of the issue and make permanent repairs. Our brokerage has access to some excellent companies for this.
Waterproofing a foundation is another way to prevent water intrusion and avoid potential issues in future. You can waterproof both interior and exterior of foundation.
Another issue to watch for, because it can also affect the exterior of the home as well is to keep large trees and bushes from touching the house, both near the foundation and the siding. At the foundation level, roots can cause actual cracking if pressure on the foundation is not relieved.
Roots of trees and bushes grow toward water and can not only destabilize but also penetrate foundations. You may need to remove or move trees or bushes to ensure your foundation is safe from this issue. The best time to remove trees is in Winter when they are dormant. A good arborist would be able to tell you if this is potentially necessary.
Make sure that sidewalks, landscaping and patios, that butt up against the foundation, are tilted or pitched away from the foundation so that 10-degree runoff is working to keep your foundation free of water intrusion.
Unfinished basements will reveal any potential issues, and, many water intrusion problems can often be solved just by ensuring you have clean gutters with appropriate downspouts and leader extensions to funnel water away correctly. Also, it is a good idea to cover the window box to a foundation with a plastic cover to keep rain and snow from accumulating there.
You can easily find any cracks or water intrusion or evidence of past water intrusion unless the basement is finished off. If that is the case, look for rust colored water stains as evidence of previous or current moisture issues. These rust-colored stains typically will show through painted walls or ceilings.
As you view the property, if you notice unusual structural offsetting, such as windows and doors that appear to be crooked, or floors that pitch down and are no longer level, that could also be a sign of structural issues, potentially brought on by failure of the foundation. A structural engineer is your best bet to discover what the issue is, whether it’s typical settling or something else, and, how to correct it.
Keeping your eyes open when viewing homes will help you assess whether or not a home is a good investment, and, let you know if a seller is caring for the home or if it is being neglected.
Written by Claire Bastien for www.FindYourMinnesotaHome.com
What Clients Find Out During a Home Inspection
Buyers have an opportunity to inspect their home right after their offer is accepted, and during that short inspection period, Buyers can get an idea of whether or not the seller maintained the home well. The best home inspectors review the entire property, commenting on and photographing all exterior and interior issues starting with the roof, gutters, downspouts, chimney, siding and the exterior grading of the property. Also, any concerns on the driveway, sidewalks and condition of landscaping will be covered, pointing out any flaws or needed repairs or updates.
In a seller’s market, especially where multiple offers are present, contingent inspections are less likely to be considered by sellers, however, offers made with a non-contingent inspection do get consideration, and, sellers appear to be willing to make some repairs in some cases. In multiple offers, where my clients have paid well over list price, with a non-contingent inspection, the sellers did agree to make some repairs.
In a market where neither Buyer or Seller dominates, or, in a true Buyers’ market, where Buyers have stronger negotiating power, sellers may be more willing to give back funds to the buyer in lieu of doing repairs. Alternatively, if there is time, and you can get some estimates, it pays to find out what the work will cost to complete, and get an escrow set up by the lender or title company to pay contractors after closing, especially if repairs cannot be completed by the time you close.
One of my 2020 clients received a name brand new window and some extensive exterior stucco repairs, amounting to $25,000, paid for by the seller after closing. An escrow fund was created for one and a half times the amount of the anticipated repairs, and the funds were held in escrow by the lender until the work was satisfactorily completed. Only when the Buyer was satisfied was the contractor paid and Seller reimbursed the unused portion of their funds from the escrow.
Sellers sometimes look at repairs needed, such as chimney, roof, siding, etc., and have taken the cost of that into consideration by listing their property at a lower price point than like-kind housing. Even in this low inventory market, however, buyers are often overpaying for a property in need of expensive repairs, and, they get no real price break for the repairs because of non-contingent offers. Unless buyers have big cash reserves, I encourage my clients to pass on these types of properties and to be careful when writing non-contingent offers. Don’t overpay unless you can afford it.
Especially for first-time buyers, it’s very important to consider your cash flow and reserves in those situations. You don’t want to have to spend all your cash reserves doing the sellers’ deferred maintenance. You might need that money for other things, as, often furnishings you own no longer work in the new spaces and you have other new expenses.
On the interior, the ceilings and walls are inspected for cracks that might be more than naturally occurring hairline cracks which happen with settling over time. If windows and doors are not level, that could be an indicator of potential structural issues. When a home inspector finds issues that indicate settling, and you want to get to the source of this issue, the basement foundation and structural supports are to be inspected for issues.
Because many homes in the twin cities can be up to or over 100 years old, checking for structural foundation issues, temporary structural supports or repairs to the foundation is important, provided the basement walls haven’t been finished, which would hide any potential issues. Non-level flooring, crooked doorways and window frames could be evidence of unrepaired structural issues, allowing the home to settle inappropriately. Hiring a structural engineer to examine the home for structural issues is smart if you are still considering buying the home, or, if you wish to add onto the structure, and need to know if it will bear the additional weight.
This structural inspection can cost up to or over $500, depending on how extensive a report is needed, but, if the Buyer intends to purchase, it is worth the additional expense to discover if the house needs costly repairs or not. Better safe than sorry.
A client spent funds on a structural report to find out if building a second floor onto a garage was possible, and to verify that a structure was stable. Another Buyer was purchasing on a creek, and, as the house was on an elevation, and showing a fracture in the basement flooring, the stability was in question. A structural engineer confirmed the crack in flooring was a torsion stress fracture from a 1964 tornado and not a structural flaw.
No home inspector can see through walls to check the condition of the plumbing and wiring. A visual inspection will show if all sinks and drains are leak proof or not. All outlets should be checked for reverse polarity issues and point out whether some outlets are updated to GFCI or ‘ground fault interrupter circuits’ allowing the breaker to trip if the circuit is overloaded. Since these need to be installed within 6 feet of water, they should be installed in the kitchen, bathrooms, laundry and sometimes in the garage as well. An efficient inspector will check every outlet in the house and let you know if there are any issues.
Attics often can show signs of past or current issues, like moisture problems, bathroom vents not connected to the roof when roofs were redone, snow or rain water leakage, condensation issues, or pest intrusion as well as low insulation levels. It will be smart of the Buyer to get an accurate idea of what corrections might need to be done in the attic. Best case scenario you do nothing, or can add some more insulation. Worst case the attic is improperly vented or you have pest intrusion or insufficient insulation.
It is best to know what is going on though and get any potential issues fixed.
Buyers want to know the age and life expectancy of their HVAC and water heater. How old is the system, how much potential useful life does it have? Any Buyer would love to have new HVAC and water heater and new roof in their home, saving the cost of replacing those bigger ticket items for years to come, however, you will compete in multiple offers with other Buyers for homes that have those updates.
One client was told during inspection that the furnace was not working properly and might need replacement, so asked the seller to provide a furnace repair. Initially, a contractor told seller he’d need to replace the furnace, however, a subsequent estimate from another contractor found the repair was possible and would cost one third of replacing the furnace. Of course, the seller opted for the repair, and, the Buyer had to be happy with that instead. So, although the outcome is that the furnace worked at closing, there is no guarantee of how long it will keep working, and, it is wise to save some funds in case old systems stop working after you own the property. Also, be sure the furnace filters are changed regularly, sometimes that has been the only reason a furnace was cycling on and off a lot, and, changing the filter out made all the difference.
Another Client had the water heater fail a month after they purchased. However, the seller had purchased a home warranty for the buyers, so, for $150 in fees, they received a new water heater. The Buyers saved the $1200-$1600 price they might otherwise have had to pay.
Having a sewer line camera is also essential, unless the home is relatively new. Older sewer lines can be clogged by tree roots which can cause sewer backups. If there are other issues, like breaks or drop offs, a sewer camera will point them out. It is worth the expense to ensure the sewer is functioning well and needs no repairs.
One of my clients found their home had no internal access to the sewer line, so, the seller had to establish one, and in performing the sewer camera it was shown that the sewer line was not connected to the city sewer line. This repair needed to be done in Winter and cost over $10,000 in total repairs, however, the expense was on the seller side.
Some cities require sellers to ensure the sewer line is clear and in good condition, and, in those cities some sellers like to pay the buyers closing costs in lieu of doing those repairs, if the city doesn’t mandate that the seller must perform that fix. Many sellers have paid via escrow for the sewer repairs and buyers scheduled the work once they moved in with no additional expense.
Radon gas inspections are also very common, Radon being a colorless odorless gas which causes lung cancer. Radon remediation is recommended if the gas levels exceed 4 pci/l and this must be tested in a 48hr test if you are going to complete it during inspection. There are other tests which last longer and you can get them from the EPA, State of Minnesota Health Department or purchase at some hardware stores, but, those take longer to get results. During inspection you don’t have the luxury of time.
High Radon in the home above 4pci/l is a Material Fact to be disclosed, and, can be a negotiation point with the seller, since they would have to share with subsequent buyers if the current buyer backed out of the sale. Most sellers would likely wish to cover the cost of remediation, if there are no other issues coming from inspection, or possibly at least contribute something to buyer’s closing costs.
The home inspection is where the buyer learns as much as possible about what is happening at the property and everything taken altogether will let you know how well a seller has kept up the home maintenance as well as what you will need to do when you are the homeowner. Smaller items or issues you wish to control can be done once you move in, and the report can be a future resource reminding you to do regular maintenance annually.
The home inspector I currently use also provides a comprehensive report with photos and a home maintenance workbook with explanations of all the home systems. It is a great way to get to know your new home better before you buy, and information in the report is a great tool to help sellers understand needed repairs during the negotiation period.
Written By Claire Bastien for FindYourMinnesotaHome.com
The Ongoing Costs of Home Ownership: What First Time Buyers Might be Ignoring when Buying a Home
Homeownership may start with a down-payment and applying for a mortgage, but that is just the first part of the process. Many first-time homeowners forget about all the additional costs associated with owning a home during their investigations into mortgage financing, interest rates and monthly house payment, to get an idea of what their monthly budget might look like.
Apart from potential fees such as a Homeowners Association (HOA) and the utility costs (Buyers might find cooling or heating a house is more costly than an apartment!), and, general maintenance, which typically can average out to about 1% of the value of the home annually, monthly fees can rack up. This is especially true if you have some updates planned. You never know what surprises might lurk inside that wall you planned to take down or what other unforeseen costs could be coming down the road.
If you are first-time homebuyers, we hope you have gotten your home inspection and have a thorough report as reference, as well as the inspector and your realtor to consult in case a repair is needed.
Also, not shorting your future cash reserves, by putting down more than necessary as your downpayment, is key when making your offer, because even new homes will need some additional cash expenditures. Every new home will not come with window blinds, shades, draperies, and, even if you have all the furniture, old items may no longer work with the layout of your new home. There will always be unexpected expenditures, and, you may need new equipment and supplies to handle yard work you didn’t have previously.
Several things to keep in mind for new home-buyers are what mistakes to avoid once you own:
- If you have an issue arise, make sure you call the correct person for the job. If the repair person doesn’t have a specialty in fixing what is broken, you could be throwing good money after bad. Since specialists can cost as much or more than $135.00 an hour, knowing some information in advance can help you can keep your costs down and better understand if you have the right person for the job. Doing some basic research in advance may help you explain the issue over the phone and ensure you understand the nature of repairs. This can help you nail down the right person for the job and nail down factors such as how long it might take to fix and what your potential expense might look like.
- Get a referral from a trusted source, such as your realtor or your home inspector for a good contractor. You need someone recommended by others, preferably with some good reviews. Even your neighbors might be a good resource for tried-and-true vendors, depending on what you need, so, keep that in mind before you go online so you have a basis for reference.
- On average, home maintenance can cost about 1% annually of the home’s value. You may not spend 1% annually, but, saving for the big-ticket maintenance items, such as; a new roof, new HVAC or a new driveway or siding, will help you plan for those years where you spend more. Many Buyers decide to purchase an annual Home Warranty to offset some of the repair costs. Recently one Buyer was able to get a new water heater right away when hers died within the first month of homeownership because of the warranty! Some years your costs will be lower, while other years some bigger ticket items might need immediate attention, so, the key is to be prepared.
- Never ignore routine maintenance because those little monthly or seasonal chores left undone could cost you dearly in future. Change out the filter on your furnace as needed, some must be done monthly, some quarterly, but, schedule it on your calendar and have extra filters on hand. Forgetting to shut off exterior faucets in the Fall, or, to disconnect the Sump Pump hose in late Fall early Winter, or reconnect the sump hose in Spring could result in some water leakage issues which are easily avoided. Use your home inspection as a maintenance tool and reminder of what tasks need completion throughout the year. Then, put them on your calendar and check them off each month.
- Rushing into a renovation before spending time in using a space is another common mistake Buyers make. Live in your home a bit and see how you really use it before you decide to move forward with your plans to remodel. You might change your ideas over time or decide other issues require more immediate attention. Don’t just look at the house as a showcase for all that brand new furniture you wanted to buy, or how you can make it look like something you saw on a home improvement show. You may ultimately decide to revise your plan because a new idea actually suits your needs better. If your plan included new landscaping, before you start, wait to see what comes up in the yard, in case you missed all the perennials because you bought in late Fall, or remove plants you didn’t know would come up in Spring. Take the time to get to know everything before spending that money.
- Annually Winterize your home, unless you live in a Southern state where you can avoid Winter altogether. Consider adding to attic insulation, caulking exterior windows or other areas around the exterior where warm air escapes, drain those hose connections, and putting a silicone seal around glass in windows will all help to save on Winter heating bills. Your trusted home inspector might have itemized a list for Winterizing which will make it your go-to list for Fall.
- If you purchased as a married couple or there are two of you owning together, don’t assume you are both on the same page with everything that might come up around the home. It can put a strain on the relationship when an issue arises and you are not in agreement on how to remedy a problem. Ensuring you have good communication throughout the process, especially before you buy, will help you work together to get things done in a way that works for you both, especially when it comes down to how you are spending money. Never make decisions without first discussing with your spouse or partner. Whether it’s paint color, home décor or bigger ticket items, which might mean taking on additional monthly expenses like replacing windows or something you pay off over time. You would not want someone to purchase a big-ticket item like a new car without consulting you first, so, having a conversation in advance about it will clear the air about how to proceed. You will find it more rewarding to accomplish your goals together.
When is the Best Time to Buy a Home?
Home buyers are always asking me, when is the best time to buy a home? Maybe the better question to ask is, what factors determine a good time for me to buy?
Is your lease about to terminate or come up for renewal? Are there other market factors such as mortgage rates remaining low that drive your search? Also, do you know much do you need for a down payment and how much can you afford?
Several factors go into determining when is your best time, such as: what is your credit score, debt to income ratio, your savings on hand, and do your future life plans include remaining in your current market? These factors also help determine if buying sooner rather than later is in your best interest.
Questions your Exclusive Buyer Agent can help you with are:
- Do you have 2 years or more work history in the same field?
- Do your Future career plans include remaining in the same market area?
- Do you need to enroll children in a school district before school starts in the Fall?
- Do you need to be concerned about a commute or can you telecommute? Is that likely to change?
- Do you have enough savings for purchasing now, or, do you have high enough income and credit score to use down payment assistance to get into that first home?
These are questions that will help you determine what is your best time to enter the current or future market.
Your personal or joint income and lifestyle will also help you decide what type of housing will work best. Is a single-family house right for you and your future lifestyle plans, or is it more in line with buying a condo or townhome?
Current market conditions can also affect your home-buying decision. Historically, buying in the later months of the year have resulted in some savings over purchasing in the Spring-Summer market, however, does that historical factor remain consistent in a Seller’s Market when inventory is low?
Minneapolis Area Association of Realtors Association annual report indicates that Closed Sales were up 7.7% in 2020 over the previous year, while inventory is still remaining lower than average year of year. And, Pending sales were up 9.7% over 2019.
No matter your age or buying power, we can help you get all your questions answered quickly, because we are actively helping other buyers so we are current with today’s market conditions.
With this knowledge we can help you strategize a plan to negotiate a great deal for a new home in any market, because we have phenomenal lenders, inspectors, closers and other help you get you into the home of your dreams and start building equity in any month of the year.
Depending on the area in which you wish to live, how long you wish to live there, and other market trends, you can start creating equity with home ownership in the short term.
We can help you make your dreams come true while protecting your best interests, no matter your age or home-buyer status.
Six ways to make better use of your patio
Summer is here and you want to spend it outside. We all do, especially in Minnesota when our time outside is dictated by the weather. Or at least the activities we can do outside are dictated by the weather. Realtor.com has a few suggestions to make the most of your summer with some backyard additions:
- Sectional furniture – can be easy to build or buy
- Get a fire pit – they come in a wide range of styles and prices
- Bench swing – imaging sipping a lemonade while you swing
- Picnic table with built in cooler – ready for guests any time
- Backyard Tiki bar – make this the exotic summer to remember
- Deck planters – a great way to try out a green thumb