Tara O'Brien's Minneapolis Real Estate Update

Edina Realty and Tara OBrien have this beautiful Grant Park Townhome for sale.It has 3 bedrooms, 3 bathrooms and 2 car heated parking. Very exquisite upgrades throughout this home. Stainless steel appliances, granite countertops in kitchen and bathrooms, marble and slate custom shower with spa jets, cherry flooring and cabinets, gas fireplace in living room and more. Huge finished square footage with high ceilings and custom paint that is very tasteful. This is turn key and ready for a new buyer.

MinneapolisCondosTaraOBrien

Labels: buying a home, condo for sale, condos and lofts, homes for sale in minneapolis, homes for sale., minneapolis condos, minneapolis market, minneapolis real estate, minnesota real estate

Labels: buying a home, buying and selling a home, condos and lofts, home buying process, home for sale, homes for sale., housing, housing prices, market update, minneapolis real estate, minneapolis realtors

Open House this Sat. Nov. 20 2010

Labels: home for sale, homes for sale., minneapolis market, Minneapolis Neighborhoods, minneapolis real estate, minneapolis realtors

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.

1. Decide what you can do yourself
TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.
Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer
Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.
If you’re doing the work yourself, price the supplies.
Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs
Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it'll cause problems when you resell your home.
Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.
Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work
If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems. Get written estimates for repairs before you commit to buying a home with structural issues.Don't purchase a home that needs major structural work unless:
You’re getting it at a steep discount
You’re sure you’ve uncovered the extent of the problem
You know the problem can be fixed
You have a binding written estimate for the repairs

5. Check the cost of financing
Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings. If you’re planning to fund the repairs with a home equity or home improvement loan:
Get yourself pre-approved for both loans before you make an offer.
Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.
Consider the Federal Housing Administration’s Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.
6. Calculate your fair purchase offer
Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.
For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.
The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.
Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

7. Include inspection contingencies in your offer
Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.

Radon, mold, lead-based paint
Septic and well
Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

G.M. Filisko is an attorney and award-winning writer whose parents bought and renovated a fixer-upper when she was a teen. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Labels: buying a home, buying and selling a home, condo for sale, condos and lofts, home for sale, homes for sale., minneapolis realtors, minnesota real estate

Homebuyer incentives can be smart marketing or a waste of money. Find out when and how to use them.

When you’re selling your home, the idea of adding a sweetener to the transaction—whether it’s a decorating allowance, a home warranty, or a big-screen TV—can be a smart use of marketing funds. To ensure it’s not a big waste, follow these dos and don’ts:

Do use homebuyer incentives to set your home apart from close competition. If all the sale properties in your neighborhood have the same patio, furnishing yours with a luxury patio set and stainless steel BBQ that stay with the buyers will make your home stand out.

Do compensate for flaws with a homebuyer incentive. If your kitchen sports outdated floral wallpaper, a $3,000 decorating allowance may help buyers cope. If your furnace is aging, a home warranty may remove the buyers’ concern that they’ll have to pay thousands of dollars to replace it right after the closing.

Don’t assume homebuyer incentives are legal. Your state may ban homebuyer incentives, or its laws may be maddeningly confusing about when the practice is legal and not. Check with your real estate agent and attorney before you offer a homebuyer incentive.

Don’t think buyers won’t see the motivation behind a homebuyer incentive. Offering a homebuyer incentive may make you seem desperate. That may lead suspicious buyers to wonder what hidden flaws exist in your home that would force you to throw a freebie at them to get it sold. It could also lead buyers to factor in your apparent anxiety and make a lowball offer.

Don’t use a homebuyer incentive to mask a too-high price. A buyer may think your expensive homebuyer incentive—like a high-end TV or a luxury car—is a gimmick to avoid lowering your sale price. Many top real estate agents will tell you to list your home at a more competitive price instead of offering a homebuyer incentive. A property that’s priced a hair below its true value will attract not only buyers but also buyers’ agents, who’ll be giddy to show their clients a home that’s a good value and will sell quickly.If you’re convinced a homebuyer incentive will do the trick, choose one that adds value or neutralizes a flaw in your home. Addressing buyers’ concerns about your home will always be more effective than offering buyers an expensive toy.

G.M. Filisko is an attorney and award-winning writer who gritted her teeth and chose a huge price decrease over an incentive to sell a languishing property—and is glad she did. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Labels: buying and selling a home, home buying process, homes for sale., minneapolis real estate, minnesota real estate

Chimney maintenance and a fireplace inspection can make the difference between warm safety and drafty danger.

Your fireplace, the most low-tech piece of equipment in your house, may seem like a simple load-and-light operation, but ignoring annual maintenance can impair its performance, leading to heated air (and dollars) blowing out the chimney, harmful smoke inside, and possibly even a chimney fire.

The average number of annual U.S. home fires caused by fireplace, chimney, and chimney connectors between 2003 and 2005 was 25,100, and the average costs for those fires was $126.1 million, based on the most recent statistics from the Chimney Safety Institute of America. That’s roughly $5,024 in damage per home. Annual chimney maintenance removes flammable creosote, the major cause of chimney fires, and identifies other performance problems.

Is it worth the $205 fee, two-hour service call, and all that ash possibly blackening your carpet? Here’s what you need to know to decide.

Annual inspections keep flames burning right
Creosote—combustible, tar-like droplets—is a natural byproduct of burning wood. The more wood you burn, the wetter or greener the wood, and the more often you restrict airflow by keeping your fireplace doors closed or your damper barely open, the more creosote is produced.

Soot build-up, while not flammable, can hamper venting. One half-inch of soot can restrict airflow 17% in a masonry chimney and 30% in a factory-built unit, according to the CSIA. Soot is also aggressively acidic and can damage the inside of your chimney.

The more creosote and soot, the more likely you are to see signs of chimney fire—loud popping, dense smoke, or even flames shooting out the top of your chimney into the sky. Chimney fires damage the structure of your chimney and can provide a route for the fire to jump to the frame of your house.

“If the chimney is properly maintained, you’ll never have a chimney fire,” says Ashley Eldridge, the education director of the CSIA.

The best way to ensure your chimney isn’t an oil slick waiting to ignite? Get it inspected.

Three inspection levels let you choose what you need
A level-one inspection includes a visual check of the fireplace and chimney without any special equipment or climbing up on the roof. The inspector comes to your house with a flashlight, looks for damage, obstructions, creosote build-up, and soot, and tells you if you need a sweep. If so, he’ll grab his brushes, extension poles, and vacuum, and do it on the spot.

“You should have it inspected every year to determine if it needs to be swept. An annual inspection will also cover you if the neighbor’s children have thrown a basketball in it, or a bird has built a nest,” says Eldridge.

A level one typically runs about $125. Add a sweep, and you’re talking another $80, or about $205 for both services, according to CSIA.

Consider a level-two inspection if you’ve experienced a dramatic weather event, like a tornado or hurricane; if you’ve made a major change to your fireplace; or bought a new house. This includes a level-one investigation, plus the inspector’s time to visit the roof, attic, and crawl space in search of disrepair. It concludes with a sweep, if necessary, and information on what repair is needed. The price will depend on the situation.

A level three inspection is considered “destructive and intrusive” and can resemble a demolition job. It may involve tearing down and rebuilding walls and your chimney, and is usually done after a chimney fire. The cost will depend on the situation.

Small steps can improve your fireplace’s efficiency
Besides the annual sweep, improve your fireplace’s functioning with responsible use.

Only burn dry, cured wood—logs that have been split, stacked, and dried for eight to 12 months. Cover your log pile on top, but leave the sides open for air flow. Hardwoods such as hickory, white oak, beech, sugar maple, and white ash burn longest, though dry firewood is more important than the species. Less dense woods like spruce or white pine burn well if sufficiently dry, but you’ll need to add more wood to your fire more often, according to CSIA.

Wood, only wood! Crates, lumber, construction scraps, painted wood, or other treated wood releases chemicals into your home, compromising your air quality. Log starters are fine for getting your fire going, but they burn very hot; generally only use one at a time.

Close your damper when not using the fireplace to prevent warm indoor air—and the dollars you’re spending to heat it—from rushing up the chimney.

On a factory-built, prefab wood-burning fireplace, keep bifold glass doors open when burning a fire to allow heat to get into the room.

Have a chimney cap installed to prevent objects, rain, and snow from falling into your chimney and to reduce downdrafts. The caps have side vents so smoke escapes. A chimney sweep usually provides and can install a stainless steel cap, which is better than a galvanized metal one available at most home improvement retailers because it won’t rust, says Anthony Drago, manager of Ashleigh’s Hearth and Home in Poughkeepsie, N.Y.

Replace a poorly sealing damper to prevent heat loss. “You can get a top-mounted damper that functions as a rain cap, too, an improvement over the traditional damper because it provides a tighter closure,” says CSIA’s Eldridge.

Install carbon monoxide detectors and smoke detectors in your house—near the fireplace as well as in bedroom areas.

If you burn more than three cords of wood annually, get your chimney cleaned twice a year.
A cord is 4-feet high, by 4-feet wide, by 8-feet long, or the amount that would fill two full-size pick-up trucks.

To burn fire safely, build it slowly, adding more wood as it heats and keeping your damper completely open to increase draw in the early stages.

Burn the fire hot, at least occasionally—with the damper all the way open to help prevent smoke from lingering the fireplace and creosote from developing.

By the way, fireplaces aren’t officially rated for energy efficiency because they’re so varied. Depending on the source of information, they can be 10% to 30% efficient in converting fuel to heat.

No inspection will turn a masonry or factory-built fireplace into a furnace, but it can improve efficiency somewhat, decrease the amount of heating dollars you’re sending up the chimney, and increase your enjoyment of your hearth time by reducing smoke. If a sweeping prevents a chimney fire, you’re talking about the difference between another ordinary January day, and the potential loss of your home, or even life.

Wendy Paris is a writer in New York currently living in a home with a very smoky fireplace that has set off the smoke detector more than once. After finishing this article, she decided to schedule a chimney sweep. She’s written for This Old House magazine, as well as for The New York Times and Salon.com.

Labels: buying and selling a home, home buying process, homes for sale., purchasing condos, sell my house, staging your home for sale

Converting your basement into living space requires being aware of building codes and understanding special requirements.

Finishing your basement into a family room, game room, or spare bedroom is a financially sound decision. In addition to increasing the usable (and enjoyable) living space of your home, a finished basement pays back a high percentage of your investment at resale. According to Remodeling Magazine’s annual Cost vs. Value Report, a basement remodeling project returns more than 75% of its original cost.

The cost of finishing your basement into usable living space is about $100 per square foot—generally less expensive than building up or out from your existing footprint. That’s because the basic structure—your home’s foundation—is already in place. Placing occasional-use areas, such as a laundry room, a spare bedroom, or a home theater below grade means that square footage above can remain dedicated to daily uses.

Code considerations
The first step is to determine if your existing basement meets building codes for habitable space. As defined by the International Residential Code (IRC), a basement living space must have a clear, floor-to-ceiling height of at least 7 feet (6 feet for bathrooms). There are some exceptions for the presence of exposed structural beams, girders, or mechanical system components along the ceiling, but only if they’re spaced at least 4 feet apart and extend no more than 6 inches from the ceiling. Note that local and regional building codes may vary—always check the specific codes in your area.

If your existing basement ceiling height doesn’t meet those specifications, you have two options: The first is to raise your house and build up the foundation around it to gain the ceiling height you need. The other is to lower the floor, which entails removing the existing concrete slab floor, excavating to the desired level, and pouring new concrete footings and a floor slab. Both options require professional and precise engineering, excavation, and structural work that will cost at least $20,000.

Emergency egress
Assuming, though, that your existing basement meets the IRC definition of “full height,” your next code challenge is to accommodate egress. The IRC dictates that at least one of a habitable basement’s windows or doors to the outside must be large enough to serve as an emergency point of egress (or exit, as well as an emergency rescue access) in addition to the staircase to and from the home’s main level.

If you’re planning a basement retreat to include a bedroom (what code calls a “sleeping” room), that room and all other sleeping rooms also must have their own point of egress, in addition to the one required for a general “living” space, such as a rec room or home office.
Each egress opening must be at least 5.7 sq. ft. with the windowsill no more than 44 inches above the floor, among other requirements that allow safe passage to the outside in the case of an emergency.

If you have a walkout basement, egress shouldn’t be an issue. Otherwise, you’ll have to build an egress. Most basement walls are built using poured concrete or masonry blocks, which can be cut (although not as easily as wood-framed walls) to create openings for egress windows or doors.

A proper staircase
In addition, the IRC regulates the specifications of the staircase from your home’s main level to the basement. Requirements include a handrail and stairs with proper width, tread, and riser dimensions. Also, there must be at least 6 ft. 8 inches of headroom at every point along the staircase.It may be that you simply need to add a handrail—perhaps with a balustrade if the staircase is open to the basement instead of encased in a wall structure. If the stairway isn’t wide enough (at least 36 inches) or the steps aren’t to code, you may have to rebuild them, an extra cost of about $2,000.

Make sure your contractor confirms or considers code compliance for ceiling height, egress, and the staircase in your project budget to avoid potential conflicts, delays, and additional costs.

Checking for moisture problems
Arguably the biggest problem with basements is moisture and water infiltration. If you have seen water or moisture on your basement walls or floor, or signs of efflorescence or mold as a result of long-term dampness, you’ll need to solve that problem before you go any further. In addition to damaging finishes and eroding your home’s structure, unchecked moisture and water may cause mold and mildew growth that can adversely affect your health.

Depending on the severity of the water infiltration, and your available budget for a basement retreat, you have several options for addressing moisture problems. The best solution is to determine and solve the root cause, which is usually hydrostatic pressure from water in the surrounding soil pushing moisture through the basement walls or floor.

In that case, it’s best to excavate around the perimeter of your home’s foundation and install a drainage system and waterproofing membrane to relieve hydrostatic pressure against the structure and effectively block water from getting through the walls—a professional job that can cost $5,000 or more.

If that’s too far out of your budget, and the moisture issue is relatively minor, you can cover all cracks and joints with a 100% acrylic elastomeric sealant and apply brush-on coatings to the inside poured concrete or masonry walls and floor surfaces, a DIY project that might cost about $1,700 for a full-size basement.

If there’s a potential for flooding in your basement, think twice about turning the space into a living area. Even a minor flood can ruin flooring and finishes, leading to expensive repairs.

Your best defense against minor flooding is a sump pump. A sump pump automatically engages in the event of a flood and is about a $1,400 investment with professional installation. Because sump pumps run on a dedicate electrical circuit from the service panel, you might also consider a battery-operated backup pump (around $300) to engage in the event of a power outage, such as during a severe storm.

Heating and cooling your remodeled basement
Your next task is to extend or supplement your home’s heating, cooling, and ventilation systems to serve the below-grade spaces. Those systems also requires code compliance for occupant health and safety (such as adequate venting of furnace combustion gasses), though typically nothing out of the ordinary or restricted by most jurisdictions.

With your contractor, make sure that your existing HVAC system can adequately keep your additional living space comfortable and properly ventilated. Sizing a furnace and air conditioner is a calculation generally based on square footage per ton of capacity. However, contractors should consider the home’s insulation values and other high-performance building practices to “right-size” the equipment and balance its performance and cost.

If your existing HVAC setup is not up to the task, you may have to add a secondary system dedicated to your finished basement or replace your existing system with larger-capacity equipment. Installing a vented room air conditioner and heater may add a few thousand dollars to your budget, while a complete HVAC system upgrade can run $10,000 or more.

A usable basement will also need electricity for lighting and other fixtures or finishes, such as an entertainment system or small appliances. Most homes will have adequate capacity in their existing electrical service box for basic needs; if not, a subpanel may be required to bring power to your retreat at a cost of a few hundred dollars.

Adding a bathroom
The last big (and also potentially expensive) consideration is whether to add a bathroom to your basement retreat. The main issue here is draining wastewater to the existing city sewer or on-site septic system, and venting sewer gasses directly to the outside—just as your other bathrooms do—in compliance with building codes. That’s why a bathroom alone might be a $10,000 line item in your basement retreat budget.

Wastewater drainage typically relies on gravity, so you have to make sure that the waste pipes from your basement bathroom sink, shower or tub, and toilet are designed with enough of a slope (or “fall”) to drain properly and effectively. Achieving proper fall will require the removal and rebuilding of a small section of the basement slab and excavation of the ground underneath. The process involves digging a trench for the drainage pipe to connect the new bathroom to your home’s existing drainage system.

For the toilet, you might also consider a pressure-assisted toilet. A toilet equipped with a pressure valve forces waste through the pipes, rather than relying only on gravity to do the job. Such a unit may allow you to avoid digging into the foundation—consult with a licensed plumber about the feasibility. Expect to pay $150-$800 for a pressurized toilet.

If possible, locate the toilet (and any water-using appliance, such as a clothes washer) against an outside wall. This location will reduce the costs required to drain away waste and vent sewer gasses. Vents typically are required to extend up the wall (either through the structure or along the outside) to a height of at least 8 feet and at least 4 feet from any operable windows.

Converting your basement into finished living area calls for a contractor familiar with the special requirements of basement remodeling. When looking for a contractor, be sure to find one who has experience as a basement remodeler.

Rich Binsacca has been writing about housing and home improvement since 1987. He’s the author of 12 books on various home-related topics, is currently a contributing editor for Builder and EcoHome magazines, and has written articles for such magazines as Remodeling, Home, and Architectural Record. He still has the plans and cost estimate for the addition of a finished basement to a previous house, which required digging out the crawl space to create a full-height room.

Labels: buying a home, buying and selling a home, home for sale, homes for sale., housing, housing prices, sell my house

A well-landscaped yard creates curb appeal and helps your property retain maximum value.

A beautiful yard is a head-turner, no doubt about it. The good news is that even if you can’t tell a tulip from a turnip at the garden center, you can still create eye-catching curb appeal by paying attention to the basics of good landscaping. Ignoring your yard—or doing something that’s out of character with the neighborhood—can jeopardize the assessed value of your home.

“We have several categories for design and appeal,“ says Frank Lucco, a real estate agent and professional appraiser in Houston. “That’s where we make those adjustments. Poorly maintained landscaping can be as much as a 5 or 10% deduction.”

Appraisers are quick to praise the allure of a well-tended lawn and good-looking landscaping when it comes time to sell your home, but most do not assign any specific increase in monetary value for upkeep.

“Landscaping is going to add to the appeal of the property and it may sell quicker, but it’s hard to determine value,” says John Bredemeyer, president of Omaha-based Realcorp. “You have to have a number to compensate someone if you drove into their tree and killed it, but is it really market value? Probably not.”

Nevertheless, most professionals agree that curb appeal and a well-maintained appearance prevent your property from losing value. Here are the top suggestions from real estate agents, appraisers, and landscape designers for boosting the curb appeal of your yard:

Green up the grass
If your house has a front yard, make sure it‘s neat and green. You don’t want bare spots, sprawling weeds, or an untrimmed appearance.

“It’s so simple to go to Home Depot, buy fertilizer, apply it every six weeks, and water it,” says Mitch Kalamian, a landscape designer in Huntinginton Beach, Calif. “It will green up.”

If the yard looks really scruffy, you may decide to invest in some sod. According to the National Gardening Association, the average cost of sod is 15 to 35 cents per sq. ft. If you hire a landscaper to sod your yard for you, labor will add 30% to 50% to the total cost of the project.

Another alternative is to plant low-maintenance turf grasses. Turf grasses are durable and drought-resistant. Expect to pay $18 to $30 for enough turf grass seed to plant 1,000 sq. ft. of lawn area.

Add colorful planting beds
Flower beds add color and help enliven otherwise plain areas, such as along driveways and the edges of walkways. In general, annual flowers are a bit cheaper but must be replaced every year. Perennials cost a bit more but come back annually and usually get larger or spread with each growing season.

If you’re not sure what to plant, inquire at your local garden center. Often, they’ll have a display of bedding plants chosen for their adaptability to your area. Also, they‘ll be inexpensive because they’re in season, says Peter Mezitt, president of Weston Nurseries in Hopkinton, Mass. Try pansies in the summer, and asters and mums in the fall to add vibrant color. “That’s what we do around the entrance to our garden center,” Mezitt says.

Valerie Torelli, a California REALTOR® who dresses up her clients’ yards to sell their houses faster and for more money, says that in her market, she can put in a bed of colorful annuals and bark, as well as cutting down overgrown shrubs, for less than $500. “We can buy gorgeous plants for $3.99 to $15.99,” she says.

Add landscape lighting
For homeowners who have made a sizeable investment in landscaping, it makes sense to think about adding another 10% to 15% to the bill for professional lighting. “You can’t see landscaping after dark,“ says Brandon Stephens, vice president of marketing for a landscape lighting firm in Lubbock, Texas, “and buyers are not always looking at houses on a Saturday afternoon.”

The cost of a system runs from $200 for a DIY installation to more than $4,000 for a professional job. If you‘re doing it on your own, the key is to light what you want people to see, such as mature trees and flowering shrubs.

Plant a tree
The value of mature trees is particularly difficult to determine. Lucco says that in his market, mature trees contribute as much as 10% of a $100,000 property’s overall value. In addition, a properly placed shade tree can shave as much as $32 a year on your energy bills. Expect to pay $50 to $100 for a young, 6- to 7-foot deciduous tree.

You can make your own initial assessment of the value of your property’s trees by visiting the National Tree Benefit Calculator. For example, a mature Southern red oak tree with a diameter of 36 inches in the front yard of a house in Augusta, Ga., would add $70 to the property value this year, according to the calculator.

Georgia-based freelance writer Pat Curry writes extensively about housing and real estate for consumer and trade publications. While a fair hand at remodeling, she is hopeless as a gardener. As a result, her landscaping is made up of plants that thrive on neglect

Labels: home staging, homes for sale., housing, staging your home for sale

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability
As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment
How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.
The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt
Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide
The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership. However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

Labels: buying a home, buying and selling a home, home buying process, homes for sale in shakopee, homes for sale., minneapolis market, minneapolis real estate, mortgage information, what do I qualify for

By doing your homework before you buy, you'll feel more content about your new home.

Most potential homebuyers are a smidge daunted by the fact that they are about to agree to a hefty mortgage that they'll be paying for the next few decades. The best way to relieve that anxiety is to be confident you're purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.
1. Decide how much home you can afford
Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.
2. Develop your home wish list
Be honest about which features you must have and which you'd like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.
3. Select where you want to live
Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.
4. Start saving
Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies. However, the lower your downpayment, the higher the loan amount you'll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get. Finally, if your downpayment is less than 20%, you'll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.
5. Ask about all the costs before you sign
A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area”including home inspections, attorneys fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.
6. Get your credit in order
A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage. You're entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn't up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.
7. Get prequalified
Meet with a lender to get a prequalification letter that says how much house you're qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements. If you're self-employed, you'll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years. Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.

Call me today to help you with your home purchase and to answer any questions you have.

www.TaraOBrien.com

Labels: buying a home, home buying process, homes for sale., minneapolis market, minnesota real estate

Money goes further some places in the United States than it does in others.

Housing, in particular, has remained most affordable in the South and the Midwest. That’s because of less stringent building, an abundance of land and growing populations in the South, says Daniel McCue, a research analyst at Harvard’s Joint Center for Housing Studies.

To determine the cities that offer the best quality of life for the least amount of money, Forbes magazine calculated the ratios between a city’s median home price and its median household income. It also factored in projected job growth. And it compared median income to Moody’s Economy.com’s cost of living index.

Here are the 10 cities that it found to offer the best value, and the cities that it believes offers the worst value.

Cities Where Residents Get the Most for Their Money


1. Austin, Texas

2. San Antonio, Texas

3. Indianapolis, Ind.

4. Houston, Texas

5. Charlotte, N.C.

6. Columbus, Ohio

7. Dallas

8. Minneapolis/St. Paul

9. Denver

10.Portland, Ore.


Cities Where Residents Get the Least for Their Money



1. Los Angeles

2. Providence, R.I.

3. New Orleans

4. Philadelphia

5. Cleveland

6. New York

7. Milwaukee, Wisc.

8. St. Louis, Mo.

9. Washington, D.C.

10.Sacramento, Calif.


Source: Forbes, Abha Bhattarai (10/10/2008)

Labels: homes for sale., housing prices, minneapolis market