Fresh-Baked Cookies . . . at Closing?!?

by Ross Kaplan on October 21, 2014

Realtor — and Title Company — Trade Secrets;
or, “What’s That Toaster Oven Doing Next to the Copy Machine??”

Home Buyers associate fresh-baked cookies with open houses.

cookiesThe smell creates a nice “homey” vibe, and puts prospective Buyers in the emotional mood  . . . to buy.

But, I’d never encountered fresh-baked cookies at closing before.

At least not until last week.

The cookies were courtesy of Liberty Title (I noted a toaster-oven in the corner of the office, discretely located next to the copier).

P.S.:  Want a Realtor trade secret?

Store-bought cookies warmed up in the oven at 300 degrees for 10 minutes accomplishes the same effect.  My personal favorite:  Keebler chocolate chip.

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Less Distress

by Ross Kaplan on October 21, 2014

Twin Cities Short Sales, Foreclosures Fall to 7%

The general public may not be aware, but local Realtors certainly are:  the percentage of distressed sales in the Twin Cities is now about 7%.

That’s a far cry from the +50% level breached just four years ago.

Amongst other benign effects on the local housing market:  1) the downward tug on median sales prices is gone; and 2) there are dramatically fewer appraisal issues, caused by “outlier” distressed sales.

P.S.:  the other, catch-all term for distressed sales is “lender-mediated.”

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Homes With No Basement: How Big a Discount?

by Ross Kaplan on October 20, 2014

When Bigger Isn’t Better

Just like the discount for a one-car garage varies, so, too, does the discount for a home with no basement (at least in the Twin Cities discounthousing market, where single family homes routinely come with — and Buyers expect — finished basements).

The biggest variable driving the discount for no basement?

The home’s size.

Specifically, the bigger the home, the wider the discount locally.

Anecdotally, I’d peg the range from 10% to more than 30% (or, in the case of a Buyer for whom no basement is a deal breaker — an infinite discount).

(Note:  a one-story home on just a slab is sometimes referred to as a ”California rambler.”  They’re not common in the Twin Cities, but are most often found near bodies of water and where the water table is high).

Likely Buyer Profile

The reason that the discount increases with size is because larger homes usually appeal to a family Buyer with a couple of kids.

basementUnfortunately, it’s precisely those larger families . . . who also want a basement for their kids to hang out, the extra storage space a basement affords, etc. 

By contrast, a smaller home with only one car stall or no basement is more likely to be bought by a single or couple, who might easily make do.

Downsizing — But Not to a Condo

Medium and smaller homes with one-level living (and sometimes no basement) are increasingly attractive to downsizing retirees, typically younger (50′s – 60′s) and active, who may still want a yard for gardening, pets, etc. but no longer need their 5 BR/4 Bath, 4,000 FSF two-story (and the related maintenance, utility bills, and property taxes).

Meanwhile, condo’s and townhomes don’t meet some downsizers’ space/yard/pet/privacy needs.

Discount for Condition; “Paying Wholesale”

Of course, the other scenario where bigger house size is a liability is a whole-house remodel.

The cost to tackle a dated +4,000 FSF home could easily exceed $300k, if you include a new Kitchen, multiple bathrooms, new windows and HVAC.

It’s a lot harder to find a Buyer capable of biting that off than updating a 3 BR/2 Bath home with 1,800 FSF that might only cost $100k to remodel.

P.S.:  The more extensive the remodeling needs, the more likely it is that a home will be bought by a professional remodeler — who then needs to re-sell at a profit (and be compensated for their risk).

When that’s the case, the discount expands considerably.

If you want a more succinct way of putting it:  ”the pro’s pay wholesale (prices).”

See also, “Discounting For a One-Car Garage.”

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The Jack O’Lantern House

by Ross Kaplan on October 19, 2014

Is it Halloween Yet?

[Editor's Note:  With Halloween approaching, I thought it was timely to re-post a favorite from previous Falls.]

I’m a big fan of dramatically lit homes.

And with the seasonal change, we’re heading into ever-shorter Fall days.

And yet, the technique doesn’t work all the time — and can even backfire: especially for smaller homes, interior lighting at night can produce an (unhelpful) “Jack-o-Lantern effect.”

The (kind of) scientific explanation?

The ratio of (orange) interior lights to (white) exterior is lopsided in a small house with lots of windows, making it seem like a back lit pumpkin.

A back lit pumpkin, of course, is the reverse combination, i.e., interior white and exterior orange (dyslexia helps with that one).

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Open House Today (10/19) From 1 – 3 p.m.

October 19, 2014

Prime Lake Forest Location Where:  2315 Parklands Road in St. Louis Park’s Lake Forest neighborhood. What:  Cape Cod-style home with great bones and nice finishes. When:  1 p.m. to 3 p.m. today.  Days on market: six (listed 10/13). How much:   $529,000. Who:  listed by Ross Kaplan, Edina Realty – City Lakes. If you’re looking for […]

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“Days on Market at Most Recent List Price” (Now Also Known as “PDOM”)

October 18, 2014

Difference Without a Distinction? The most recent MLS tweak is a change to how market time is reported. Previously, the acronym was “CDOM,” for Cumulative Days on Market; it reflected how long a given property was on the market since listing. Shouldn’t That Be “DOMP??” MLS still shows “CDOM,” but now it also displays something […]

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True or False: “Expired Listings Aren’t Useful in Establishing Fair Market Value”

October 17, 2014

The Value of Contrary Information About all I remember from my one college statistics course is something called “the coefficient of correlation.” Ranging from “+1″ to ”-1,” it indicates how predictive/associated one variable is with another. Which leads to some counterintuitive insights. Such as (as the Statistics professor noted), if you’re picking investment advisors, the ideal is someone whose stock picks are always right […]

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The Most Important Closing Detail of All

October 17, 2014

Pre-Closing Checklist Test your mastery of real estate minutiae, and answer the following multiple choice question: What’s the last (if not most important) pre-closing detail to get right? A. The client’s net number on the HUD-1. B. Still-needed signature(s) on any last-minute Purchase Agreement Amendments. C. The listing agent’s sign riders from the “For Sale” sign (once the […]

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