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For Chanhassen Homeowners, a July Maintenance Checklist

For Chanhassen Homeowners, a July Maintenance Checklist

In addition to our Independence, the Fourth of July also marks a sort of mid-year pause. Families with kids have by now shuffled them into summertime activities. All graduates have graduated; the gardens have all been started (and some parts of it, even harvested!). This used to be the season for television series reruns, resulting in measurably less TV-watching; but cable programmers have obliterated that notion—and this year, the Rio Olympics will draw much attention back indoors.

But for the most part, the beginning of July marks OTY: the undeniably Outdoor Time of Year. It’s the sunny, healthy time of year; time to get out of the kitchen and see how much outdoor cooking can get done. It just feels healthier—even if there are just as many calories in a burger cooked outdoors as in the kitchen.

For Chanhassen homeowners who have been telling themselves they would get around to the annual home maintenance chores pretty soon, it’s also the time of year when they are uncomfortably within visual range of many the details that call out for some quality maintaining. A sagging gate that really should be reinforced; paving stones that tree roots are slowly but surely upending—they may not demand attention in December, but—let’s face it—it’s already July!!!

The outdoor features most in need of attention are different for every Chanhassen home, but here is a universal maintenance checklist culled from some of the items that commonly deserve attention. They may not be precisely those that warrant your ministrations, but may serve to jog your memory about the ones that make up your own maintenance checklist:

Deck & Patio – when the weather’s clear, it’s prime time for staining (it usually is an annual task—no matter what the label on the can promised).

Pots & Planters —new ones and old ones deserve “feet” beneath them…or any solution that facilitates draining. The surface beneath will benefit—and likely need less attention of its own later on.

Mold — it’s really easy to deal with if it isn’t allowed to accumulate for years. The products that make eradication easy can be found at all Chanhassen hardware stores.

Drainage — while you’re out in the yard attending to everything else, keep your eyes open for evidence of runoff where it doesn’t belong. Trace it back to the source: if it’s just the beginning of a drainage issue, dealing with it early can save a lot of expensive grief later on.

Windows — pests frequently enter through cracks and openings that develop around window frames. You may need a ladder to be able to spot what’s developing on top, but if needed, a little caulk will keep your home’s “envelope” intact.

A/C — every kind of air conditioner needs to have its filter cleaned or replaced to prevent needless strain on the fan motor. If not July—when?

It feels good to have an annual look-see at how your home is standing up to the wear and tear that the past year has rendered. Once any issues have been dealt with, the rest of the summer will be that much more enjoyable. And on the very practical side, if and when you decide to hand your Chanhassen home off to a new owner, the financial rewards for having kept it in prime condition over the years will be measurable. I’ll be here in the meantime—standing by to answer any and all questions about our area’s real estate market! Contact me today at cindy@joeandcindy.com or 952-484-2953.

Eden Prairie Home Inspections Under the Magnifying Glass

Eden Prairie Home Inspections Under the Magnifying Glass

When you are buying your first Eden Prairie house, understanding the way a home inspection helps facilitate the process will help you to get the most out of the opportunity it represents. It might seem as if the home inspection step is one of those technical legal formalities that only serve to slow down the purchase. Like an automobile inspection the Department of Motor Vehicles demands when all you want to do is get your car legally registered, it can seem like an irritating and time-consuming bureaucratic hurdle. But, like those auto inspections, if it turns up a problem you didn’t suspect, it can be a godsend!

Your Eden Prairie home inspection and the home inspection professional who conducts it are charged with performing a function that is specifically tailored to protect your interests. For first-time Eden Prairie home buyers, making the most of the process doesn’t take any study or preparation. The best Eden Prairie home inspectors (they’re the only ones I recommend-call for a referral) will make it easy to look over their shoulder during the inspection. It’s not required that you be there, but it’s a very good idea to do so. When you follow along—see what they are looking at, and find out why—you will be taking advantage of this first chance to acquaint yourself with some of the inner workings of your future home.

Most normal-sized home inspections take somewhere between 2 ½ to 4 hours. The ultimate work product will be a written report, which may be computer-generated (those are usually completed quickly—sometimes even onsite) or based on a handwritten checklist. Where specific issues are uncovered, photos may be included for illustration. The plumbing, heating, A/C, electrical, exterior and roof will be examined, with a professional’s opinion on their condition. The object is to give you an unbiased view of the complex items that lie beneath the surface of your future home.Eventually, every house has systems whose components will need maintenance or repair—and even the most candid seller isn’t likely to have a professional quality estimate of what their longevity is likely to be. The home inspection procedure is designed to provide a general idea of what to expect (and how soon to expect it) …although it’s good to remember that the inspector is only able to form an opinion based on what is visible and accessible.

One last important aspect of the inspection process: the written report should be read! Even if you have accompanied the inspector for the entire tour and have discussed the findings, consider the written report “must” reading. It encapsulates all of the findings under one cover— in later years, it can be a valuable reference.

We're lucky in Eden Prairie to draw from a variety of skilled home inspection resources. When the need arises, I’ll be happy to recommend the best from which to choose!

Looking to buy your first home? Contact the JCT Group at Keller Williams Realty Elite.

4+ Reasons to Call Real Estate Investments “Smart”

4+ Reasons to Call Real Estate Investments “Smart”

When you see any title containing the words “Real Estate Investment,” you won’t be terribly surprised if the response turns out to be what a good idea! When you’ve had the experience of seeing clients succeed with many real estate investment projects, it’s an unavoidable conclusion. Unfortunately, also not looked at seriously by many.

That’s why I was pleased to come across Grant Cardone’s piece in Entrepreneur magazine. We all like to see our opinions agreed with—but doubly so when you’re offered specifics that bolster your own conclusions. The article listed reasons why real estate investments are “your smartest investment.” Here are just four of them:

  1. A real estate investment is a hedge on inflation. Inflation hasn’t been hugely important for a while, but serious investors have an eye out for the possibility. When you dig down, you find that real estate investments have “historically shown the highest correlation to inflation” of other major asset classes.
  2. Real estate investments enable positive cash flow. This was Entrepreneur’s number one reason. Having an investment which throws off cash while building equity at the same time is any smart investor’s ideal situation. When a real estate investment produces an income stream that is significantly higher than the typical stock dividend, what investor wouldn’t be interested?
  3. Leverage. A typical real estate investment makes it relatively easy “to place debt on the asset” because of its built-in collateral value. Entrepreneur offered some math to back up the way low-cost debt works to multiply a real estate investor’s power.
  4. Maximizing tax benefits. Taxes can be the bane of any investor—so real estate provisions that lighten the load can be significant factors influencing your bottom line.

Those are four of the solid advantages detailed in Cardone’s article.  One last advantage is less demonstrable but, just as real:

  • “Feeling the pride ownership” (no further explanation necessary).

For a list of all eight reasons listed and the full article, click here.

If you are an investor who is beginning to look over the year’s performance and thinking about how you want 2017 to look, I hope you’ll do two things.

First: take a serious look at whether a real estate investment might make a smart addition to your current portfolio.

Second: call us!

Cindy Hanson Welu is the team lead and listing/marketing specialist at the Welu Home Team.  She has been a full-time realtor for 16 years and her team consistently ranks one of the top teams in the state of MN. The Welu Home Team with Keller Williams Realty Elite can be reached at 952-943-1324 or team@joeandcindy.com.

Is there “ Normalcy Bias” with Mortgage Interest Rates?

Is there “ Normalcy Bias” with Mortgage Interest Rates?

If you look up the term "normalcy bias," you find yourself swimming in psychological theoretician talk, most of which deals with people's response to disastrous situations. The theory behind it is that when faced with the unknown, there is a tendency among even rational human beings to misconstrue new (and even dangerous) circumstances as being more normal and safe-than is often the case.

How this relates to the current real estate market is not as farfetched as you might think.

Ask anyone who wanted to or bought a house in the early 1980s, and my guess is you will probably get an earful. Due to inflation since, the asking price for homes would be pretty inviting today...that is until you check into what the mortgage interest rates were at that time. A home valued at $250,000 today would have had an asking price in 1983 dollars of just over $94,000-a real bargain.  But, the 30-year mortgage interest rate in October 1983 was a colossal 18.39%! In today's dollars, the monthly payment on a $250,000 mortgage would be a daunting $4,295.00! That's not including taxes and insurance.

No one is predicting 18% mortgage interest rates are right around the corner-or even any time in the future-but no rational observer is predicting they will remain at today's historic lows either. Not for nothing is "normalcy bias" or also known as "analysis paralysis." There's more than idle speculation behind the suspicion that change is in the air.

A case in point came last week when mortgage interest rate watchers got a peek into the rate-setters minds. The November 2nd release of the Federal Reserve's notes from their last Open Market Committee meeting wasn't entertaining reading, but did shed some light on what lies ahead:

  • Committee members agree their goal remains 2% inflation (it's less than that now) coupled with "maximum employment and price stability."
  • They believe the case for a rate hike has strengthened but is not yet sufficient to raise rates.
  • The Committee expects economic conditions will evolve to warrant gradual increases in the Federal funds rate.
  • Two members voted to raise the target rate ½ to ¾% without waiting further.

 

All in all, if future home buyers have a normalcy bias which leads them to expect today’s rates will be around indefinitely, it’s safe to say they are more likely to be disappointed than not. As the saying goes, don’t ignore the signs and keep your head in the sand hoping if you don’t see it, it won’t happen.  Today is an excellent time to take advantage of all the home deals populating the real estate market while interest rates remain historically low.  Give our team a call for a free home buying consultation.

Cindy Hanson Welu is the team lead and listing/marketing specialist for the Welu Home Team at Keller Williams Realty Elite.  The Welu Home Team can be reached at 952-943-1324 or team@joeandcindy.com.

The Past, Present & Future of Home Prices

The Past, Present & Future of Home Prices

CoreLogic released their most current Home Price Index last week. In the report, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month and projected over the next twelve months.

Here are state maps for each category:

The Past – home appreciation over the last 12 months

Actual YearOver

The Present – home appreciation over the last month

monthover month

The Future – home appreciation projected over the next 12 months

Forecasted Year over year

Bottom Line

Homes across the country are appreciating at different rates. If you plan on relocating to another state and are waiting for your home to appreciate more, you need to know that the home you will buy in another state may be appreciating even faster.

Do You Know the Cost of Renting vs. Buying? (Infographic)

Do You Know the Cost of Renting vs. Buying? (Infographic)

Some Highlights:

  • Historically, the choice between renting or buying a home has been a close decision.
  • Looking at the percentage of income needed to rent a median priced home today (30%) vs. the percentage needed to buy a median priced home (15%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

Don’t Disquality Yourself… Over Half of All Loans Approved Have a FICO Score Under 750

Don’t Disquality Yourself… Over Half of All Loans Approved Have a FICO Score Under 750

The results of countless studies have shown that potential home buyers, and even current homeowners, have an inflated view of what is really required to qualify for a mortgage in today’s market.

One such study by the Wharton School of Business at the University of Pennsylvania, revealed that many Millennials have not yet considered purchasing a home, simply because they don’t believe they can qualify for a mortgage.

The article quoted Jessica Lautz, the National Association of Realtors’ Managing Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie Mae CEO Tim Mayopoulos:

“I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.”

Ellie Mae’s Vice President, Jonas Moe recently encouraged buyers to know their options before assuming that they do not qualify for a mortgage:

“Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO Score and a 20% down payment to buy.”

So what credit score is necessary? Below is a breakdown of the FICO Score Distribution of all closed (approved) loans in August from Ellie Mae’s latest Origination Report.

Over 50% of all approved loans had a FICO Score under 750. Many potential home buyers believe that they need a score over 780 to qualify.

Bottom Line

If owning a home of your own has always been a dream of yours and you are ready and willing to buy, find out if you are able to! Let’s get together to determine if your dreams can become a reality sooner than you thought!

The Role Access Plays in Getting Your House SOLD!

The Role Access Plays in Getting Your House SOLD!

So you’ve decided to sell your house. You’ve hired a real estate professional to help you with the entire process and they have asked you what level of access you want to provide to potential buyers.

There are four elements to a quality listing. At the top of the list is Access, followed by Condition, Financing and Price. There are many levels of access that you could provide to your agent to be able to show your home.

Here are five levels of access that you could give a buyer with a brief description:
1. Lockbox On the Door – this allows buyers the ability to see the home as soon as they are aware of the listing, or at their convenience.
2. Providing a Key to the Home – although the buyer’s agent may need to stop by an office to pick up the key, there is little delay in being able to show the home.
3. Open Access with a Phone Call – the seller allows showing with just a phone call’s notice.
4. By Appointment Only (example: 48 Hour Notice) – Many out-of-town/state buyers and relocation buyers visit an area they would like to move to and only have the weekend to view homes. They may not be able to plan that far in advance, or may be unable to wait the 48 hours to be shown the house.
5. Limited Access (example: the home is only available on Mondays or Tuesdays at 2pm or for only a couple of hours a day) – This is the most difficult way to be able to show your house to potential buyers.

In a competitive marketplace, access can make or break your ability to get the price you are looking for, or even sell your house at all.

Appraisers & Homeowners Don’t See Eye-to Eye on Values

Appraisers & Homeowners Don’t See Eye-to Eye on Values

In today’s housing market, where supply is very low and demand is very high, home values are increasing rapidly. Many experts are projecting that home values could appreciate by another 5%+ over the next twelve months. One major challenge in such a market is the bank appraisal.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the selling price when performing the appraisal for the bank.

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s get together to discuss this, and any other obstacle that may arise.

For Minnetonka Homes for Sale, Sustainable Landscaping Gains

For Minnetonka Homes for Sale, Sustainable Landscaping Gains

Homes for sale in Minnetonka compete in the marketplace based on the major search criteria that have long been in place: location, architectural style, number of bedrooms and baths, overall size, style, quality, age, etc.

It’s a given that curb appeal and the property’s other photogenic qualities also make a difference for how much buyer interest is generated, and how soon serious offers roll in. We who deal in the marketplace also keep an eye on any emerging or strengthening trends and that could impinge on our town clients’ properties’ popular appeal. One of those factors might be in the process of becoming more important—it has to do with landscaping.

In any year, this is the season when landscaping makes the biggest impact on potential buyers. If January is prime time to show off a home’s outstanding fireplace or welcoming radiant heating setup, July does the same for a property’s outdoor living attributes. A welcoming yard or leafy patio can be the final extra feature that propels a house for sale in Minnetonka into the ‘sold’ column—but now it seems more important that the effect be due to the right kind of greenery!

That’s the takeaway from the ASLA’s latest query to its membership. The American Society of Landscape Architects is its members’ pre-eminent professional association. Part of their charge is to track the trends and innovations in what is called residential outdoor design elements—exterior features that can make a home for sale more saleable—or, it now seems, less so.

In their latest poll, landscape architects were asked to rate the expected popularity of backyard design elements based on what they are hearing from the field. Needless to say, we might expect those factors to show a commensurate impact on their popularity with prospective buyers of our Minnetonka homes for sale.

Among the Top Ten project types that registered the highest expected consumer demand, all but two reflected some element of the same theme: water sustainability. Scoring highest was “Rainwater/graywater harvesting” with 88%. The next three most popular project types also showed an awareness of water conservation. “Native” and “Drought-Tolerant” plants and “low maintenance landscapes” each weighed in with more than 80% of respondents. “Permeable paving”—which can be a method of avoiding water wastage through pavement washing, came in next. Also in the list were “rain gardens”, “drip/water-efficient irrigation,” and “reduced lawn areas.”

Water conservation has long been a serious concern for those with a keen green awareness quotient, but when responses on this kind of popularity list reach eight out of ten, that awareness and concern must be notching up considerably. It’s something to bear in mind for those whose Minnetonka homes will be up for sale in the future—particularly if any landscape beautification projects are being considered. I hope you will feel free to call me whenever a question arises about how to prepare your own property for Minnetonka’s active real estate market!

Cindy Hanson Welu is the marketing/ listing specialist and team lead for the JCT Group with Keller Williams Realty Elite. She has successfully helped over 1700 home sellers put a SOLD sign in their yards – contact her for FREE consultation. You could be next! cindy@joeandcindy.com

Twin Cities Real Estate Prospects Get Some Clarity

Twin Cities Real Estate Prospects Get Some Clarity

The first half of the year was brought to an end with a lot of happenings—any one of which could have a significant impact on the Twin Cities real estate market in the months ahead. The biggest event was another unpredicted swoon in mortgage interest rates.

The National Association of Home Builders released their quarterly Eye on the Economy commentary, which projected “little risk” of a financial crisis from the events in Europe. And in fact, global markets did a good job of rebounding from the previous week’s dips, ending the week pretty much in pre-Brexit territory. NAHB’s view of the stateside situation retained its optimistic tone, noting that “housing remains a bright spot for an economy overcoming yet another soft first quarter…” That was borne out statistically, with housing’s share of the economy on the increase.

CoreLogic’s MarketPulse for June supported that view, showing a home price index that rose 6.2% year-over-year, and completed foreclosures down nearly 16%—which put foreclosures at pre-Recession levels. They noted another interesting fact: cash sales as a share of the market fell to 33% of all sales, a level that matched what it was before the housing crisis. That’s the first time that has happened, and could well signify a final end to real estate’s recovery phase.

The National Association of REALTORS® reported on home resales for the previous month, and it was more good news for sellers. Resales rose to a more than nine-year high, with median house prices soaring 4.7% from the same period in 2015. The annual rate was projected at more than 5 ½ million units, “the highest level since February 2007.”

Next, Harvard University released a State of the Nation’s Housing report, with findings that sounded similar. One standout item might be of special interest to Twin Cities real estate investors with an eye on the rental market. Nationally, the rental market continued to grow in 2015, comprising “the largest one-year increase in renter household” ever.

But the main news had to do with mortgage interest rates and the hangover from the previous week’s vote on Britain’s exit from the European Union. Trulia’s Chief Economist wrote about what Brexit means for the U.S. housing market: “The answer is no one really knows…”

That view was countered at CBS’ Moneywatch with its bold headline, “Brexit will keep U.S. mortgage rates in the basement.” The opinion was grounded on a “powerful though indirect” correlation between the two factors. Citing Bankrate’s Chief Financial Analyst’s complex reasoning, CBS followed by spotlighting the market’s verification: “Mortgage rates are tumbling…to rates not seen since 2013.”

If CBS is right, Twin City home buyers could benefit. “Mortgage shoppers are often beneficiaries of market volatility and uncertainty,” according to CBS. Of course, that only comes to pass when the right home at the right price has been found…which is where a timely call to my office enters the picture!

If you are interested in buying a home or investment property, contact the JCT Group at Keller Williams Realty Elite for a FREE consultation to see if the timing is right for you!