Around 35% of people looking for homes fall into the first-time category. The pursuit of a new home foments both excitement and stress, but for good reason. Obviously, you have never committed to such a large financial investment in your life. Though you may not be a real estate expert, you can take the critical steps required to choose a home that’s perfect for you and priced appropriately. Continue reading…
Recent trends have seen Lake Minnetonka real estate interest rates rise slightly over the past couple of months. While prospective home buyers may feel disillusioned by rising rates, let's take a look at what it may mean for them and the possibility of becoming homeowners.
As mortgage rates increase, naturally, the amount of home you can purchase decreases. In other words, the higher the interest rate, the higher the payment — and perhaps the lower the mortgage amount must be to be affordable. Borrowers need not be completely dismayed however, as there is flexibility among mortgage lenders and their qualification guidelines. Let's take a short revisit of the rate fluctuations since the presidential elections of this past November and review how interest rates have affected home affordability. How will recent Lake Minnetonka real estate trends affect the housing market?
A Recap of Lake Minnetonka Real Estate Interest Rates and the Outlook for the Future
Between the election on November 8 and Christmas of 2016, Lake Minnetonka real estate interest rates went up .75%. The rate increase was fueled in part by the feeling on the part of the American public that the new administration would enact policies of infrastructure spending, tax cuts, and a certain amount of deregulation that, once enacted, would be inflationary. In addition the skyrocketing gains in the stock market pushed the bond yields downward, and since mortgage rates are very closely tied to the US Treasury bond rates, mortgage rates had nowhere to go but up.
Most savvy economists felt when interest rates rose, they would also level off in time. And, while that is happening, it is still volatile at best. Interest rates go up and down literally daily in response to investors reacting to policies of the new administration. When investors exhibit concern that post-election inflation will continue to occur, the rates go higher. Conversely, when investors feel inflation will be softened by certain policies, delays in action, or hindrances, rates will come down.
The bottom line for interest rates is the post-election peak seems to be over, and the net result is an interest rate increase of roughly .5% since the election.
Experts predict continued rate volatility as stock market investors and the Federal Reserve work to gauge interest rate movement as part of the new government administration. Here's how that volatility is expected to impact housing activity.
The Effect of Lake Minnetonka Real Estate Interest Rates on Home Affordability
According to experts, a $350,000 home purchase on which a prospective borrower plans to put down 20%, a rate increase of .5% reduces the affordability by roughly $17,000.
While such a decrease in affordability may tend to make a prospective homebuyer look for a lower-priced home, there are other alternatives — especially if you're familiar with how most mortgage lenders operate.
For decades, mortgage lenders have used a debt-to-income (DTI) ratio in their qualification guidelines. A DTI compares the relationship of your total monthly recurring debt to your gross monthly income. Mortgage lenders typically like to see a DTI of 43% or less.
Borrowers earning, say, $65,000 annually with monthly obligations such as an auto loan and credit card bills totaling $615 per month may have qualified for the $350,000 home mentioned above. However, at a slightly higher interest rate of .5% more, they may not. Here’s why: At the income and debt totals currently, the DTI ratio was less than 43%. With the rate increase, it’s climbed to over 44%. At first glance, the only solution is to work to reduce the purchase price down to $333,000 (the original $350,000 less the $17,000 by which the affordability was reduced.) That would reduce your DTI back to a level less than 43%. However, let’s consider an alternative.
Increasing Home Affordability
Rather than trying to get the price reduced by $17,000, most experts recommend lowering your other recurring debt. As an example, a monthly credit card payment of $125 with a remaining balance of $3,125 can be reduced to roughly $45 per month by paying down the balance by just $2,000. Honestly, that may be a much easier solution and a much softer sell than trying to get the seller to come down $17,000.
Analyzing Lake Minnetonka Real Estate Interest Rates and Trends to Make the Best Decisions
It’s important to keep an eye on interest rates and other changes in the marketplace. Remember, in much the same way that the old adage, “All real estate is local,” all mortgage lending is individual. What that means is every situation is different and everyone’s DTI is comprised of components that may be changed slightly to improve the qualification percentage. Don’t make the erroneous assumption that rising rates will always reduce the price a borrower may qualify for.
See more articles pertaining to the latest Lake Minnetonka real estate interest rates and trends in the section of articles on Lake Minnetonka Real Estate just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there as well.
Much of the real estate news over the past 12-18 months has centered around an improving U.S. housing market that’s finally on the way to recovering from the last recession. Sales prices and home values have grown steadily during that time, while home inventory levels have been near historic lows. New home construction, though brisk, has struggled to keep pace with growing demand. As we prepare for the end of another calendar year, many analysts are asking the question, “Is the Lake Minnetonka real estate seller's market over?”
Let’s take a more in-depth look into answering that question.
The simple answer is “yes and no.” According to nationwide data, experts say the Lake Minnetonka real estate seller's market news making headlines next year will be that the real estate market in 2017 will be very similar to what it was in 2016. Case in point: a nationally recognized real estate website took a survey of prospective homebuyers and reported that 52% are first-time buyers – an increase of 19% from the previous year. Real estate professionals say they, too, expect a larger number of first-time buyers entering the market next year, but express caution that with those new buyers comes challenges to both the real estate market and the buyers themselves.
What has caused the forecast for more first-time homebuyers to be looking into the 2017 market? Several factors: A seemingly stronger job market and continued lower interest rates seem to be the real motivators. Plus, rents have risen almost as steadily as home values, prompting a number of first-timers to consider buying as a more sensible financial decision than renting.
The influx of first-time buyers will bring challenges – some of them of very real concern. Low home inventory is expected to continue to plague the delicate balancing act of supply and demand. Some experts say to absorb the expected 19% increase in first-time buyers, the market needs a minimum of six months of supply. However, the market has had 49 consecutive months of less than six months home supply. So, experts say, the Lake Minnetonka real estate seller’s market will probably continue, as well as throughout the nation as a whole – with some areas or regions seeing slight shifting to the contrary.
So, where will seller’s markets continue?
Cities throughout America where the population continues to increase at a steady pace are the likely candidates for seller’s markets to continue. In these metropolitan areas, housing simply won’t be able to keep up with demand. When that happens, the fewer available homes on the market become more valuable and the seller’s benefit.
In some markets, real estate professionals report a slight increase in housing inventory which has caused asking prices to be more reasonable. In addition, some sellers are offering more concessions in negotiations such as paying partial closing costs or repair allowances. However, some of the increased inventory is artificial, in a sense, because those sellers aren’t committed to selling – they are simply testing the market to find out what level of interest there may be in buying a home at a certain price point. The result, experts say, is a dilution of the so-called Lake Minnetonka real estate seller's market due to a perceived glut in inventory.
What about buying power and financing?
As always, chances are if a buyer qualifies for a mortgage loan he should still be successful in buying a home in most markets – even in a seller’s market. Experts recommend using some strategy in planning your purchase. Here’s why.
According to the website survey referenced above, over half the home shoppers responding planned to purchase in seven months or so – in the spring and summer – the housing market’s most popular time to buy. Real estate professionals say if you want to avoid competing offers and not engage in bidding wars, consider buying now or either wait another full year. That way, the market is a little leaner and there aren’t as many buyers – first-timers and others – scrambling for a limited supply of homes on the market. One expert likened the strategy to shopping for Christmas presents in, say, September. You’ll likely have everything available you’re looking to buy – without the hustle and bustle of last-minute shoppers and long lines. Given the existing home supply challenges with low home inventory, which experts say probably can’t and won’t change substantially in 2017, smart buyers could enjoy reasonable prices and less competition by buying this winter or waiting until next fall.
If you’re not ready to enter the market at the present time – because you don’t have a down payment or a lease that doesn’t expire until next spring – remember that the real estate market is cyclical. The market will likely cool off in what has been the most active areas. What that will ultimately mean is homebuyers will probably again have the upper hand one day. One expert had this to say about market shifts.
“Balanced markets don't really exist for a long period of time – they’re really only transitional. It could be six months or a year, but at some point in time even the hottest of markets… head into a buyer’s market.
So, what’s the bottom line?
It’s likely, as experts agree, that the Lake Minnetonka real estate seller's market will feature headlines including slight increases in interest rates as a result of a Federal Reserve move in the next few months. In addition, now that the elections are over there will be less daily concern about a U.S. economy in flux, although we’ll all keep a watchful eye on foreign trade and its impact on the global economy over the next year or two. Lastly, though the home ownership participation rate has been the lowest in decades, it appears to be climbing slightly, giving real estate professionals and economists hope for greater increases in 2017 and years beyond.
See more articles pertaining to a Lake Minnetonka real estate seller's market in the section of articles on Lake Minnetonka Real Estate News just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
In most parts of the United States, real estate is – over time – a good investment. And while we all know that to be true, often this nagging question remains unanswered: “How do I get started buying Lake Minnetonka investment real estate?” For some millennials and others the answer is, “Just do it.” Let’s look at how you can make a start in building your Lake Minnetonka Investment real estate portfolio.
Though it seems somewhat ironic to use millennials as a segment of the population perhaps best suited to start a modest Lake Minnetonka investment real estate portfolio, let’s look at a few salient points. Millennials comprise roughly 50% of all current homebuyers in the marketplace, according to the Zillow Group Consumer Housing Trends Report. And given that most millennials buy their first homes or starter homes with the intention of living there fewer than seven years, potential real estate investing could be in their future. Why? Millennials or other first-time homebuyers are in a unique position to buy their second home and maintain their first as a rental property. This can most often be accomplished by leaving the owner-occupied original mortgage intact without selling the property. Hopefully, the mortgage was acquired with a modest down payment and is accompanied by a low interest rate.
Obviously, if a borrower is able, it’s much better to keep the first property and rent it rather than trying to purchase a non-owner-occupied rental property. Financing for rental property usually requires a higher down payment – 20%-25% – and will likely have a higher interest rate, as much as .50%-.75% or more. In summary, it will almost surely cost less to arrange for your current house to become a rental property and purchase a second home to use as a primary residence than to buy a second property for use as a rental home.
Quite naturally, in order for this growing Lake Minnetonka investment real estate portfolio to be successful two factors need to be considered:
1 ) You must be able to find a tenant for your first home. This is important not only for the additional rental income to pay for the mortgage, but many millennials or first time homebuyers may find it difficult to qualify for a mortgage on the second home unless they have a tenant under lease.
2) You must be able to come up with the necessary down payment for the second home. With low down payment financing available for as little down as 3% in some cases, this is possible. Most first time homebuyers rely on the equity from the sale of their first home to be able to afford the down payment on their new one.
There are certain tax advantages to be enjoyed by renting one of your properties. We recommend discussing them with an accountant in order to make sure you’re up on the latest tax rules regarding Lake Minnetonka investment real estate. As a normal rule, the best tax advantages come in the form of depreciation of the rental property along with being able to deduct both the mortgage interest and the maintenance expenses of the rental property.
Choosing the Best Rental Property
If you’re contemplating turning your first home into a rental property, it’s probably best to consult with a Lake Minnetonka investment real estate professional first to better understand the market and establish a strategy of what you want to accomplish. In addition, there are considerations to discuss regarding whether there is a viable rental market for your home. Experts say homes with one to three bedrooms are likely to rent more easily and more often than larger homes. Lastly, and the real estate rental professionals can better help with this, it’s important to understand who the typical tenants are in your market as well as the type properties they usually rent. That will give you insight as to where to advertise, what rents to charge, what terms to ask for and other decision-making factors.
Assessing Rental Rates
As is the case with rental properties across the country, Lake Minnetonka investment real estate rental rates have been on the rise in the last year or so. In addition, rental rates vary widely in the single-family home and condominium rental market. Most real estate professionals agree that one of the most challenging aspects of renting a home is being able to establish a rental rate low enough to be competitive in the market yet high enough to pay the mortgage and related expenses while making a small profit each month. Again, consult your local Lake Minnetonka investment real estate rental professional for the most current information on what the market will bear and what you can expect to rent your home for.
Aside from the financial considerations, one of the most important things to remember about renting out your first home is becoming a landlord. You’ll need to budget both your time and money in order to be able to take care of your tenant’s needs as they arise. Of course, you can hire a property management company to handle the typical chores of a landlord, but there are expenses involved with such an arrangement. Still, it may be worth looking into to see if the rental market will enable you to cover a portion of the rental management fee by raising the rent.
Most experts say when it comes to starting a Lake Minnetonka investment real estate portfolio comprised of rental property, “buy and hold” is usually a good philosophy. However, there are precautions you should take if you’re thinking about making the leap. If you find yourself in a sellers market, just realize that it may be more difficult to buy the second home without getting the needed equity out of the first. However, there are other options such as refinancing.
See more articles pertaining to real estate in the section of articles on Lake Minnetonka Real Estate just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
Most real estate on the market is comprised of homes listed by real estate professionals. In addition, some properties may be available for sale directly by the owner. FSBO is the industry acronym for “For Sale By Owner.” One of the common misconceptions with Lake Minnetonka FSBO properties – or FSBOs – is the myth that because the sale doesn’t involve a real estate agent it will somehow be simpler. This is rarely the case. Let’s examine a few key points to keep in mind if you’re in the market for Lake Minnetonka real estate and come across a home that is advertised as a Lake Minnetonka FSBO.
Most Lake Minnetonka FSBO sellers will still work with your agent.
Typically, savvy home sellers are aware that most buyers they encounter have a close relationship with a buyer’s agent. As such, they will usually make arrangements to ensure the buyer’s agent will be paid for their efforts. Dayton area real estate buyer’s agents are important participants in the home buying process. If you’re interested in taking a closer look at a Lake Minnetonka FSBO, consider calling us to make the initial contact with the seller on your behalf.
A home is a home, regardless of whether it’s a FSBO or not.
Just because a home is listed for sale by the owner doesn’t mean it should be treated any differently than a home listed by a professional real estate firm. The biggest difference between the two is the greater likelihood that you’ll be meeting, talking and negotiating directly with the seller. So be prepared. Because a home sale is often an emotionally challenging experience for some sellers to go through, be ready for some hurdles – and try your best to take them in stride.
If you’re truly interested in a Lake Minnetonka FSBO home, you’ll find a way to work around the drama. Remember, lean on your agent for assistance and expertise. In addition, if you find it necessary to view the home without the owner being there, just ask. While it’s always a little uncomfortable for owners to have prospective buyers “snoop around” by themselves or with their agent, if you’re selling your home as a FSBO it goes with the territory. Try to put yourself in their shoes and understand how you might feel if the roles were reversed. Then, use that to your advantage by assuring the seller that you simply want to take some extra time alone to envision your furniture and your belongings in what may end up being your home. Once the seller understands your insistence and reasoning, they will likely be more open to letting you have all the time you need – especially if it means the difference in making the sale.
The law is the law – and it applies to all homes equally.
Regardless of whether a home is being sold as a FSBO or not, real estate sales laws still apply. Sellers have an obligation to disclose existing issues about the home to the buyers. In addition, the seller could also be bound to have the home inspected and perform certain repairs. Unfortunately, many Lake Minnetonka FSBO sellers are rookies when it comes to selling homes, and they simply aren’t aware of the laws or common industry practices. Again, rely on your agent – and your own instincts – to determine if a seller is shirking his responsibility or making it more difficult to inspect the home than it should be. It could be a tell-tale sign that the seller knows something about his home that he doesn’t want you or your agent to find out about. If that’s even remotely the situation, keep looking. Life is too short to deal with difficult people, and money is too valuable to take a risk on a home that may be trouble in the future.
Anticipate inflated asking prices.
If there’s one factor that tends to remain consistent when owners try to sell their homes directly, it’s overpricing. Not having a knowledgeable professional real estate agent to consult often means sellers price their homes unrealistically. They tend to dismiss the market comparables and any other recent sales data and erroneously assume their home is worth more than the others in the same neighborhood. You'll often hear rationalizations or justifications expressed by owners that go something like this: "Our home is the nicest one in the neighborhood." While it's normal for any homeowner to have pride in their home and want to get top dollar when they sell, the cold hard truth is more like, "Your home is pretty much like all the others in the neighborhood – some are more attractive, some less." It’s not necessarily greed that motivates them to inflate their asking price, it’s more a case of just not knowing the market – and the Lake Minnetonka home selling process. Again, they’re rookies, and just like in the big leagues, rookies make mistakes.
If you really like the home, once again rely on your own agent to assist. By providing comparable sales information of similar homes in the neighborhood maybe your agent can convince the seller to see his price is too high. In addition, if the home has been appraised already – or if you can perhaps negotiate having an appraisal done – you can use that as a closer representation of the home’s value. If either of those ideas fail, keep looking. A stubborn owner isn’t worth the headache, and there are likely other homes on the market that are priced where they should be.
Just keep this in mind: A Lake Minnetonka FSBO home is just a home, it just happens to be listed for sale by the homeowner. Discuss the home with your agent and get his or her thoughts and input. While the negotiation process may be a little different since the sellers are going solo, remember there are still certain obligations incumbent upon the sellers. Don’t be intimidated by the fact that the seller is listing the home directly – as mentioned above, that doesn’t necessarily mean he knows more about Lake Minnetonka real estate than you – and he certainly doesn’t know the process as well as your professional agent.
See more articles pertaining to real estate in the section of articles on Lake Minnetonka Real Estate just below Lake Minnetonka Real Estate Categories in the column to your right. And remember, we also post tips daily on Facebook and Twitter. Check us out there, too.
The Lake Minnetonka real estate market has probably changed quite a bit since the last time you were part of a home sale closing, if ever. Not only has the housing market changed dramatically in recent years, but so have mortgage lending requirements. In addition, as a homeowner your needs and desires for your next home have probably changed, too. So, if you’re looking to move up or move out of your present home you’re likely in the middle of a well-known dilemma: Should you sell your current home first or buy your new one? Let’s take a closer look at that situation and consider a few ideas.
Lake Minnetonka Real Estate – Making the Right Move
A logical place to start to analyze the problem of whether to sell first or buy first is to examine just how much risk you’re willing to take. If you fancy yourself a veritable Las Vegas gambler that goes “all-in” every chance he gets, you may decide to assume a greater risk than some people. So, if you elected to buy your new home before you sold your existing home, the possibility of having two house payments at the same time may be less stressful for you than for others. Conversely, if you felt that situation would lead to sleepless nights you’d probably be more comfortable – and well rested – by taking a more conservative approach. That will entail selling your current home first before you started your new home search.
In addition to your risk tolerance, there are some other factors that could potentially sway your decision. Because Lake Minnetonka real estate prices have risen while housing inventory from which to choose continues to be thin, it’s possible you could sell your existing home but not be lucky enough to find a new home immediately. What could make matters worse is, if the added stress and pressure to rush to find a new house led you to settle for something less desirable than you wanted.
Lake Minnetonka real estate experts suggest you ask yourself these important questions to more fully understand the timing of your current home’s sale and your next purchase.
Can you afford two mortgage loans at the same time?
Carefully examine your income and obligations to determine, are you able to comfortably afford two mortgage payments at the same time? If the honest answer is “no,” then do yourself a favor and sell your current home first. A mortgage lender will ask the same question and perform the same financial analysis. Remember, just because you can afford it, doesn’t mean you should.
Some lending institutions offer bridge loans – short-term loans designed to allow flexibility between selling one home and buying another. The normal term is six months to a year.
Another consideration is where your down payment will come from. Do you have enough money in a savings or investment account you plan to liquidate? If not, are you planning to use the equity in your existing home? While some lenders may be willing to provide you with a 100% conventional loan – enabling you to buy the new home without first selling your current one – some lenders may not.
How soon do you want or need to move?
Often the biggest deciding factor of what to do first in the selling-then-buying versus the buying-then-selling conundrum is how quickly they want or need to make the move. If you’ve taken a new job that requires you to relocate out of state, it may be best to put your home on the market first. That way, as you make plans to move and begin your new home search if your home sells it will make your relocation easier and less stressful. However, if you're simply shopping for a larger home or want to move into a nicer neighborhood it could be better to not sell your home immediately. Wait until you find a new one that best fits your needs. This is where the advice of an experienced Lake Minnetonka real estate agent can be invaluable.
Are you aware of the newest regulations?
If it’s been awhile since you’ve bought a new home with a mortgage, you’ll need to be aware of some new federal regulations that took affect late last year. The TILA-RESPA Integrated Disclosure rules now require mortgage lenders to give new borrowers two forms – one at the beginning of the loan application process, and one upon loan approval. The importance of these forms is this: The Closing Disclosure form must be given to the borrower no less than three days before the loan closing. You can no longer expect to close on the sale of your existing home one day and close on the new home purchase the next.
The Closing Disclosure requires the lender to have all the integral parts of the mortgage loan finalized and approved prior to the three-day period. The result often means selling one home and buying the next can be a little “iffy.” Closing delays are a likely possibility. Know what to expect and rely on the advice of your mortgage lender and Lake Minnetonka real estate agent. It can help make the process flow smoother, without snags or delays.
Do you need a negotiating advantage?
Some experts say that purchasing your next home before selling your existing one has distinct benefits. Make an offer to purchase a home without the often-used contingency on the sale of your current home. It will likely be considered more favorably by most sellers. So, if you can swing both loan payments or can get a bridge loan or other financing, go for it!
Do you have somewhere to move while you wait to buy a new house?
As we’ve discussed, a tight housing market with low inventory gives you little from which to choose. As a result, you could find yourself without a home if you sell prior to buying something else. Before making a move requiring you to find a new home quickly or renting a place, think it through. Don’t panic or rush into buying a home you don’t really want. Take your time and make a plan. Remember, too, that it’s okay to rent while you’re looking to buy something new. Be aware that most rentals require at least a six-month lease – and many require a year.
You can find more articles pertaining to Lake Minnetonka real estate in several categories below Lake Minnetonka Real Estate Categories in the column to your right.
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Buying Lake Minnetonka real estate is an emotional process. Many buyers see a house they fall in love with and decide in their heart and mind that's the home they want to buy. If you find what appears to be the perfect home for you and your family, it’s a good idea to take a more detailed, in-depth look at the home’s exterior. The old adage, “Don’t judge a book by its cover” doesn’t apply in this case. For homes in the Lake Minnetonka real estate market, it’s important to give the outside of the home a thorough inspection. By doing so, the “cover” may, indeed, give you a better idea of the entire “book.” Let’s take a look at some of the exterior considerations to keep in mind when looking for a home to buy.
Lake Minnetonka Real Estate – Check the Outside
Trees and Foliage
Take a closer look at the trees surrounding or near the home. Pay particular attention to how close the trees are to the home’s foundation. As those trees continue to grow, the roots can expand and cause problems to the foundation. In addition, other areas like concrete or paved walkways and driveways can be affected. Furthermore, if an older tree is removed it could create a void when the roots decay, resulting in a drop in the foundation.
To ensure you can avoid potential problems it may be a good idea to seek the opinion of a foundation expert during the inspection process. Enlist the aid of an experienced tree expert of arborist to evaluate the health of trees that may affect your home.
In addition, those beautiful mature trees may have limbs that extend over the home’s roof. Have the home inspected for any signs of damage to the roof shingles or eaves. Squirrels, possums, and rodents often use tree branches to get into accessible areas of your home. When that happens, they can enter your attic through the smallest of openings in the fascia or soffit. If the home you’re looking to buy has foliage extending over its roof, consider asking the seller to prune the tree limbs. It’s also advisable to inspect the shrubbery that may be in direct contact with the house to make sure it doesn’t contain evidence of termites or carpenter ants that may have gained easy access. Naturally, to be completely sure, it’s always good to have a professional termite or wood-destroying insect inspection and treatment.
The Home’s Foundation
Check the foundation of the home for cracks. Some cracks are to be expected and most will be minor in nature. However, cracks allow moisture in the foundation and can cause deterioration – especially in climates subject to freezing temperatures in the winter.
Experts suggest that if you encounter foundation cracks you should have a contractor inspect them to determine the degree of severity. If you decide to move forward with the home purchase, the cost of the repairs – if necessary – could be a factor in the price negotiation.
Lastly, in areas prone to foundation problems, a potential purchaser should take note of the grade or slope of the soil around and against the house. The foundation should be exposed by a minimum of two inches and it should be sloped away from the house. This ensures that rainwater runs away from the foundation and doesn’t collect or pool against the home.
A Swimming Pool
If the home in the Lake Minnetonka real estate market you’re interested in has a swimming pool, there are several questions you should ask:
How old is the pool lining?
Has the pool liner been resurfaced?
How old is the pool equipment?
For a more in-depth inspection, contact a professional pool company. While a swimming pool can seem like a wonderful amenity for a home, it can also become an expensive and problematic feature for prospective home owners.
What if You Find a Problem?
If you find an issue or two with the home’s exterior, it doesn’t necessarily mean you shouldn’t buy the house. Compile an analysis of the home’s plusses and minuses. Consider the problems objectively, taking into consideration the cost to remedy them. Then, armed with that information you can either request that the seller make the necessary repairs or use that in the negotiating process. In many cases, the seller may discount the sales price based on the estimated cost of substantiated repairs a buyer may have to make. In addition, some lenders may require certain repairs be made before they provide final approval of the financing.
What if Everything’s Good?
If everything regarding your exterior inspection checks out, you should still keep in mind the future maintenance of the home.
• Continue to keep foliage and tree branches pruned
• Determine what type of grass your yard has and care for it accordingly
• If you have a lawn sprinkler system, check it regularly
• Inspect you landscape lighting
Remember, Curb Appeal is More Than Just the Obvious
Curb appeal is important in evaluating Lake Minnetonka real estate, but curb appeal is more than just an attractive mailbox or driveway. There are many other components that should be considered and inspected to make sure your prospective home is all you want it to be. Be cautious, inquisitive and have an expert inspect the home. A little knowledge beforehand can save a ton of frustration and expense after the fact.
You can find more articles pertaining to Lake Minnetonka real estate in the real estate section of our site below Lake Minnetonka Real Estate Categories in the column to your right.
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Lake Minnetonka home selling should be a happy occasion. Often, however, the next step – moving out of one home and into the next – can be stressful at best and sometimes downright traumatic. Taking a few necessary precautions can make it less worrisome, maybe almost enjoyable.
Lake Minnetonka Home Selling – A Moving Experience
Most people dread moving because of the unforeseen problems that seem to occur at every turn. A torrential rain comes as soon as the movers are loading the truck. Your car loaded with items you wanted to personally transport has an untimely flat tire. You know the drill… these things never happen at a good time, but why do they happen on an already-stressful moving day?
Following the Lake Minnetonka home selling experience, most of the common moving nightmares fall into one of these three categories. Let’s take a look at what usually happens and how we can best avoid them.
You'd think in this day and age, a reputable moving company wouldn’t have incompetent or untrained people serving its customers. However, as with any other business, it happens. It’s not uncommon for many moving horror stories to revolve around unscrupulous, inexperienced or downright bad movers.
Lake Minnetonka home selling – and especially moving – is a time-sensitive process. As such, when movers are late or – worse yet – don’t show up the resulting domino-effect can be frustrating and borderline disastrous. If you’re an understanding customer, you may give them a certain window of time before you call the moving company and complain. More times than not, you’re met with excuses about why your movers are running late or haven’t shown up yet. These excuses range from traffic jams to mechanical breakdowns to delays on a previous move. No matter the reason, you’re ready to move and they aren’t there.
Movers who are inexperienced, untrained or careless add to the stress, worry and anger levels. More frustrating for homeowners having just completed the Lake Minnetonka home selling process is that the end may not be in sight. Just when you think the hard part is over, the moving process often ends up being the worst experience.
A moving crew shows up with an undersized truck – despite your best description of what was needed to be moved, how many rooms of furniture, packed boxes, etc. Didn’t they listen when they booked your move? How can they be so incompetent and stay in business?
You watch in horror as the movers scratch your brand new mahogany dining room table and break your grandmother’s antique mirror. And those are just the damages you can see – there’s no telling what other horrors await when they move your belongings into your new home.
There is good news, however. There are relatively easy ways to avoid the moving pitfalls. Spend some time researching your movers prior to hiring them. Make sure they are licensed and insured. Ask for references and contact them to get their feedback. Check with the local Better Business Bureau or Chamber of Commerce to find out more about their business reputation and professionalism. It’s probably a good idea to purchase additional insurance for your possessions, depending on the moving company’s liability limits. Consult your insurance agent for more information.
Things that occur on the road to and from your move can often cause or contribute to added stress.
Traffic jams can delay the moving truck, sometimes to the point there may not be enough time to handle the move on a particular day. Again, the domino-effect means since you can’t move out on time, the floor refinishers can’t get in the house to do what they need to do for the new buyers, and the new buyers can’t move until the floors are completed. Often, a few hours delay may result in several days of additional delays – and possibly additional expenses.
Traffic accidents, of course, mean the moving truck will have to wait until the damaged vehicles are moved and traffic is returned to normal. Depending on the time, location and severity of the accident this could take an hour or longer. Worse still is if the accident actually involves the moving truck carrying your possessions. Then, not only do you have the delay to contend with, but any damages that may have occurred.
Mechanical failures or breakdowns are fairly common in older moving trucks due in part to the number of miles they are driven and the wear and tear they endure. In the event of a breakdown, you’ll have to wait for the moving company to send a second truck to transfer your furniture and other possessions. That creates additional delays and increases the chances damage may occur during the transfer.
Parking problems, surprisingly, account for added stress levels during a move. Especially in the case of a move to a downtown apartment complex where parking is limited or restricted, the moving truck may have to wait for an appropriate parking space. An alternative – though not a good one – is for the truck to park farther away than expected, thereby slowing down the moving process and potentially causing you to have to pay extra for the delay or long-carry charges.
While there’s virtually nothing you can do to prevent traffic accidents or breakdowns, it may be possible to reserve a parking space accessible to your new location. In addition, you can choose a moving company with experienced drivers and whose vehicles are in good operating condition.
One way to potentially avoid most moving problems following your Lake Minnetonka home selling is to plan as carefully as possible. A plan including each step of the relocation process complete with attention to detail and an allowance for delays may give you additional peace of mind. Although it’s impossible to predict and plan for every potential problem, expecting the unexpected is usually a good preparation and planning tool. When possible, have a back-up plan just in case.
Additional examples of poor organization include packing problems or not being prepared when the movers arrive. The list can range from forgetting the piano won’t fit through the front door to not having the various boxes labeled properly.
In addition, paperwork problems can often lead to additional delays. If you forget to transfer the utilities, when the movers arrive at your new home you may not have electricity or water.
Lastly, safety issues should be of utmost concern during the moving process. Remember, there will be many items that will be out of place. That could mean potential trip, slip and fall hazards. Plus, many homeowners find themselves distracted when negotiating steps, stairs or when driving in unfamiliar surroundings.
Hopefully some of these tips will help you have a smoothe moving day. Remember to also Find us on Facebook and Follow us on Twitter. We post tips there each day as well.
The Lake Minnetonka real estate market contains a relatively tight supply of homes for sale. During market conditions in which demand exceeds supply, you'd ordinarily assume that the chances of selling your home would be pretty good. However, homeowners selling older or outdated homes are finding it a little more difficult to sell. To combat this, smart sellers are turning to smart technology to attract prospective buyers. This article will examine some of the smart home technology available in the Lake Minnetonka real estate market.
Making Lake Minnetonka Real Estate Smarter
Selling your home is a competitive undertaking. No matter whether you're in a seller's market or a buyer's market, the homes that get the most attention are the ones that offer the newest, most up-to-date features. If you're over the age of, say, 50 you may remember how "cool" it was for the new refrigerator in your home to have a built-in ice-maker. How about a two-car garage with an automatic door opener? Even homes equipped with motion-detector floodlights were considered "in" just a couple of decades ago. That's why some sellers are electing to ramp up their homes with a little hi-tech to garner attention. They want to show prospective purchasers that their homes are a little more "state-of-the-art" than some homes in the same age range or price range.
According to a survey published in January by Harris Polls for a nationally-known real estate firm, roughly half of all American homeowners either enjoy some type of smart home technology or have plans to invest in it during the remainder of the year. In addition, 70% of survey respondents said they were so satisfied with the purchase or installation of their first smart home product that they were likely to purchase another one.
One of the popular misconceptions about smart home technology is that retrofitting an out-of-date home is too difficult a task or too costly. The truth is, one of the attractive features of some of the technology is the ease of installation and the comparatively affordable cost. More than 50% of current homeowners agreed they would probably install smart home technology because they felt it would help sell their home quicker. To quantify that response in a dollar amount, 65% of respondents surveyed said they would likely pay $1,500 or more to bring their home into the 21st Century. Experts say most homes won't require that much of a smart home investment.
Real estate professionals say a few hundred dollars is enough to add enough smart home technology to make a difference. Citing the gradual lowering of the prices of some of the technology over the past few years, they say it's easily affordable for most sellers interested in positioning their homes for sale. Items such as smart door locks or security cameras can be purchased for less than $500. And smart thermostats are popular with buyers that like the "set it and forget it" advantages of saving energy – and money. More complete home automation systems can be a little pricey, but often pays for itself because of the attractiveness to a potential buyer.
Smart home technology experts in the Lake Minnetonka real estate market suggest these five areas as "smart home starters:"
- A strong Internet connection and Wi-Fi network
- A smart doorbell • Smart door locks
- Smart climate controls
- Smart lighting and lighting controls
Smart technology is no stranger to newer homes and newly built homes. Now, as a result, homeowners choosing to include it into existing homes is becoming increasingly popular, both for the convenience of their owners and in an effort to provide an advantage when the time comes to sell.
Surprisingly, the rate of older American homeowners acquiring some type of smart home technology outpaces younger owners. Forty percent of homeowners aged 65 or older who own smart home products also have smart climate control technology. Comparatively, only 25% of millennials (aged 18-34) have those products.
Real estate agents remind sellers that buying a home is very much an emotional decision. If prospective buyers are able to "connect with the house" through various features that help make the home stand out above the rest, they are more likely to move it to the top of their short list. Smart technology can – and does – give the buyer the impression that the house is modern and is likely well-maintained.
See more articles pertaining to Lake Minnetonka real estate in the Lake Minnetonka Real Estate section of our site below Lake Minnetonka Real Estate Categories in the column to your right. As always, you can find information here on a variety of topics ranging from home buying and home selling tips to home improvements, home inspections, mortgage financing, homeowner's insurance and of course, all the latest Lake Minnetonka real estate news that affects all of these categories.
Remember, we also post tips daily on Twitter and Facebook. Check us out there, too.
Higher Lake Minnetonka real estate prices have ushered in the return of the house flipper. Flippers are loosely defined as investors who buy homes, maybe perform some minor or major improvements and try to immediately sell the properties –– usually at a much higher price than they paid for it. In 2015, the number of active home flippers in the market reached the highest level in almost a decade. Let's take a closer look at the future of flipping.
Lake Minnetonka Real Estate Flips Popular
According to RealtyTrac, there were nearly 180,000 single-family homes and condominiums flipped in 2015. Technically, a flip is defined as a home that is bought and resold within a 12 month period. Flip transactions comprised 5.5% of all sales in 2015 – the first increase in the flipping share in more than four years. RealtyTrac reports that flipping activity increased in 75% of the nation's housing markets. In addition, profits are setting records, too.
Lake Minnetonka real estate experts attribute the growth in flipping to the renewed confidence in the housing market's ongoing recovery. RealtyTrac says not only is the share of home flips rising again, but even smaller investors are participating in the buy and sell activity.
In some markets across the U.S. there are still a number of distressed properties on the market for sale. And, investor demand fueled by the unstable stock market has reopened this avenue for investment growth and profit gain. Real estate agents report multiple offers on the best investable properties as soon as they hit the market. If there's money to be made in a particular house, the flippers are very interested and are acting fast.
One concern on the horizon is that home prices could be rising too fast – even for the flippers' tastes. the main reason for the increase in prices during 2015 and so far this year is the basic law of supply and demand. The supply of homes on the market is low – especially near the lower end of the housing market – and the demand is high. Everybody, not just the flippers, wants a good deal. The prices for homes sold in January were nearly 7% higher than January 2015 and represented a higher annual gain than the month of December, according to CoreLogic. The fear is that house flipping will cause prices to rise even higher – artificially higher – most notably in markets experiencing the lowest inventory.
Some economists warn that as home flipping increases, it's usually an indication of potential problems in the housing market. Such was the case in the housing boom of a decade ago. The difference then, however, was that the flippers were utilizing cheap and available credit to buy their properties, with little of their own money invested in the homes. Because that type of credit and lending is no longer available as it once was, flippers instead are using a larger amount of their own cash into their deals, even with investor financing.
One leading economist said, "More inexperienced home flippers with a smaller financial cushion could be a sign of an over-speculative market, but the data indicate that flippers in 2015 continued to operate within relatively conservative margins." He went on to say that, "Homes flipped in 2015 were on average purchased at a 26 % discount below estimated market value and resold by the flipper at a 5% premium above estimated market value."
Even more concerning is the ever-weakening home affordability for the first-time home buyer or owner occupant looking to trade up. With first-time buyers comprising a much smaller share of total home buyers today than ever before, the risk of a recurring housing price bubble could continue to dissuade them from buying.
In some markets – especially urban areas – investors have to put more of their money into the property to finance it and renovate homes that are often in critical disrepair. And while the properties can be bought for relatively low sales prices and investors stand to make handsome profits once the houses are renovated and sold, investors must be careful to buy the right property in the right market. The failure to do so will result in not having the buyers they need.
Immediately following the recent housing crash, large institutional investors swooped in and purchased thousands of properties in distress. They were able to transform the overwhelming majority of those properties into single-family rental homes. Institutional investors today are buying fewer properties. Smaller investors are taking their place. And those small investors have a penchant to buy and sell – flip the homes – rather than hold onto them in a Lake Minnetonka real estate investment portfolio.
The total number of investors completing at least one flipped transaction in 2015 was at the highest level in more than eight years. The number of flips per investor was at the lowest level since 2008 according to RealtyTrac.
As home prices continue to rise, flippers in turn are seeing their returns increase. Of the homes that were flipped in 2015, the average gross profit was $55,000 nationwide. That amount represents the highest gross profit levels in a decade (since 2005,) RealtyTrac reports. The return on investment neared 46%, an increase of 2% over 2014 and an 11% increase compared to 2005, when flipping was widespread.
See additional articles pertaining to Lake Minnetonka real estate in the Lake Minnetonka Real Estate News section of our site below Lake Minnetonka Real Estate Categories in the column to your right. You can find information here on a variety of topics ranging from home buying and home selling tips to home improvements, home inspections, mortgage financing, homeowner's insurance and of course, all the latest Lake Minnetonka real estate news that affects all of these categories.
Remember, we also post tips daily on Twitter and Facebook. Check us out there too.