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!

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

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

Looking for a home mortgage? Best to go with someone you know and we know the right lender for you

If you have been shopping for homes online, you have likely seen the online lender ads, they are everywhere. Most online lenders are looking to funnel as many potential buyers or refinancers through their pipeline as possible so they use lots of gimmicky advertising to get you to apply with them. They don’t know you and they aren’t likely to get to know you.

Also, is that the best possible mortgage option for you? You may be surprised at how little you mean to them once you do sign up with them. You are just part of their pipeline and they don’t expect to have a future relationship with you. Often, because of this, customer service goes out the window.

An exclusive buyer agent (EBA) is different from a traditional buyer agent in how we approach your relationship with a lender. We want to know you and we want to understand your needs so we can advocate for you throughout your home purchase including what lenders you meet so you can learn what makes the best sense for your needs in a mortgage.

Our brokerage does not refer you to any affiliated lenders as some larger brokers might do. They may have an in-house lender and title company from whom the broker typically benefits because so much business is automatically funneled through their doors. Most buyers are so overwhelmed with details they are willing to accept an agent’s recommendation, even if they could be saving money elsewhere.

Take a few minutes to talk to us and let us show you how we truly have your best interests at heart. We can help you cut through the lights and whistles of online and other lender marketing ploys. For example, online lenders don’t disclose their loan origination fees online and most Buyers don’t think to ask because their focus is typically on interest rate and monthly house payment. They may not offer a wide enough array of loan product.

Also, we have cultivated relationships with lenders who have successfully closed many loans for our previous clients. We know several excellent lenders; those who are great for first time homebuyers, experienced lenders who work with relocating buyers and those who can get creative if you are stretching into a new market.

We’ll help you find the lender who meets your personal needs and who will share with you the options available to you based on credit score, income and any factors that influence your buying power. Did you know you can tailor your mortgage by buying down interest rate, prepaying mortgage insurance and managing your down payment amount? Do you know you can save money on loan origination fees with the right lender?

We are looking to build relationships – and that means finding you the lender, home and mortgage that meet your unique needs and your wish list! You can rest assured that a referral from a seasoned EBA has decades of successful lending experiences behind it and honed our preferences to lenders who perform well above the average lender.

We want to help you throughout all your buying experiences and be your future point of contact when questions arise.

Congrats to Jenny L! Enjoy the new home in the Longfellow neighborhood of Minneapolis

Working with Claire Bastien, Jenny L was able to find the perfect home for her in Longfellow.

Longfellow is a neighborhood in South Minneapolis bordered by the Mississippi River and the Light Rail. It’s a pretty quiet neighborhood with a city feel. It’s not far from so many amenities – some stemming from proximity to the light rail. But generally in walking distance there are restaurants, bars, a couple of small art galleries and shops to get what you need.

Longfellow is home to the Minnehaha Falls and the surrounding park. In the summer the area is bustling with picnickers, runners, biker and walkers. In the winter, the sturdy come daily to see the Falls slowly freeze.