Robert Guthridge's Blog

“Not a Drive-By!” “Must See!” Yada, Yada, Yada One of my favorite Mad magazine cartoons ( circa 1970) shows a vendor in front of a food stand with the following sign: “turkey burgers,” “chicken burgers,” “buffalo burgers,” “tuna burgers,” “veggie burgers,” etc. etc. The caption: “we have some with ham, too, but we don’t know what to call them.’ So, too, in real estate, avoiding clichés — overused, and therefore meaningless phrases — is an occupational necessity. Step #1 Of course, to avoid using clichés, you first have to know what they are. If you’ve been in real estate longer than six months, that’s like shooting fish in a barrel (sorry ). Some of the choicest clichés: –“Not a drive-by! –“Must see!” –“Amazing opportunity!” –“Great bones!” (For more in this vein, see “Real Estate Euphemisms ” New & Improved “). Step #2 The problem with all of the above — besides suffering from overuse — is that they’re generic; far better to shine a spotli...

Short Answer: Buyer’s Call [ Note to Readers :  The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced.  If you need legal advice, please consult an attorney.] RISK OF LOSS : If there is any loss or damage to the Property between the Date of this Purchase Agreement and the date of closing for any reason, including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on Seller.  If the property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, at Buyer’s option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase Agreement, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be refunded to Buyer. –Minnesota Purchase Agreement, lines 321. – 326. While the Twi...

Definition #5: What Someone Says, Post-Neck Surgery You might not guess exactly how versatile the expression, “I can’t look!” is. That is, until you literally can’t look, thanks to recent neck surgery (mine – ouch!). Here are the other definitions I’m aware of: One. “I can’t bear to watch (someone — or something) come to harm.” What spectators say when the amateur juggler starts twirling razor-sharp machetes. Example #2: at the movies (remember those?), before the homicidal clown jumps out of the bushes. Example #3: Chicago Cubs fans going into the bottom of the ninth of a playoff game with the opposing team’s tie runner at bat. Two . “It’s physically dangerous to look.” Friend #1 during the solar eclipse: “Wow! Would ‘ja look at the sun’s corona?!?” Friend #2: I can’t, I’ll hurt my eyes.” Three . “I’m busy/preoccupied right now.” Four-year old girl (plaintively): “Tommy (older brother) wrecked my dollhouse!” Mother: “I can’t look (right now) — I’m in the middle of preparing ...

Lumber Prices Are Through the Roof, Punishing Apartment Builders.” — The Wall Street Journal (5/25/2021). [ Note to Readers:  The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.] Home builders nationally are facing soaring costs. That includes inputs such as lumber, copper, and steel; fuel prices; and, last but not least, spiking labor costs — assuming builders can find skilled workers (hundreds of thousands left the industry after the 2007-2012 housing bust). Will those costs be passed through to clients? “Absolutely,” at least prospectively (as if there were any doubt). Which leaves home currently under construction. Work-in-Process How do consumers know whether their home builder can legitimately pass along increased costs? Step #1: read their contract. Assuming such language: a) exists; and b) is reasonable, the answer...

Key Variables: Type of School, Buyer  Characteristics Homes on busy streets typically fetch a discount. Is there an equivalent discount for homes located across from a school? (which, in a way, is really just a subset of “busy street” — call it , an “intermittently busy street”). I’ve never seen formal data on this, but I’d guess “yes.” I’d further speculate that the discount varies depending on the following three factors: One . School size. Here’s my formula: Bigger = more traffic/congestion = bigger discount. Two . Upper or lower school. In Minnesota, at least some 16 year-olds start to drive, smoke, litter, and generally call more attention to themselves. You’d guess that being next to a teenager-filled high school would be more disruptive than being next to an elementary school ” and therefore warrant a bigger discount. Three . Combination of setback, setting, and aesthetic appeal. At one extreme, the lower campus of the Blake School in Hopkins is straight out of a ...

Depending on what you read, you are living in parallel universes regarding what is happening in California. On one hand, you have the world is ending narrative and that people are moving to greener pastures to places like Texas. That narrative took a hit when the Texas grid went off the rails because no man […] from RSSMix.com Mix ID 8230700 https://ift.tt/3f97Zsh via IFTTT

We recently published a few lists about property and income tax rates in each state. I am a real estate investor and these statistics can help other investors know what states are landlord friendly and which states are not! Another really interesting metric is the cost of insurance in each state. Many people think insurance ... Read more from RSSMix.com Mix ID 8230700 https://ift.tt/3eVnpjV via IFTTT

Is an “alcove apartment” easier to rent than a “studio?” Apparently, at least one Twin Cities developer seems to think so. So far, the term only seems to be a feature of the rental market: out of almost 1,000 condo’s currently for sale on the local (NorthStar) MLS, only five use the term — and not as a synonym for “studio,” but as a substitute for “nook” (e.g., “gas fireplace, alcoves for cabinet, 10′ ceiling, etc.”). P.S.: the vast majority of the building cranes evident in the Twin Cities now appear to be for apartment (rental) buildings, not “For Sale” condo’s. Someone ( read , “lenders”) seems to think that’s the better bet right now . . .   from RSSMix.com Mix ID 8230700 https://ift.tt/3hrbADy via IFTTT

When “Sold” Doesn’t Mean “Sold” At least in Minnesota, when you see a “Sold” rider above a “For Sale” sign in front of a house, it doesn’t mean “Sold” — it means “Pending.” Huh?? The (admittedly confusing) convention is to pronounce a home that’s under contract and past Inspection — but not yet closed — as “Sold,” even though it’s technically still “Pending” on MLS. So, why not just put up a sign that says “Pending?” That would be my suggestion (and is the practice in at least some states). However, I suppose then people would just be confused about what “Pending” means. Whichever term is used, the goal is to let prospective Buyers know that the home in question is spoken for (and maybe, just a little, cement the Buyer’s sense of ownership). When the home is really sold, you’ll know . . . because the “For Sale” sign will be gone. P.S.: “Confusing Real Estate Terms – Advanced Beginner”: so, who are Realtors referring to when they say the “selling agent?” The agent representing...

“Screened Porches” vs. “3-Season Porches” vs. “4-Season Porches” Quick! Which kinds of porches are included in a home’s finished square feet? A. Screened B. 3-Season C. 4-Season D. All of the above. Correct answer : “C.”** If Realtors routinely confuse the various types of porches . . . I don’t know what chance a layman has. Perhaps that’s why, as a public service for Twin Cities Realtors, the local MLS helpfully describes the differences — and critically, addresses when to include an enclosed porch in a home’s finished square feet. According to the Northstar MLS’s “Rules Roundup”, here are the distinctions: 4-Season Porch/Sunroom “A 4-season porch is a room that functions as an interior room, but allows you to take in the views of the outdoors year-round. It has permanent heat and is included in the finished square footage of the home.” 3-Season Porch “A 3-season porch has windows with integrated screen systems and can be used for long periods throughout the year. They...

Multiple Offers and Appraisal Worries (Still) Alice in Wonderland would’ve loved today’s bizzaro housing market. That’s because — in the midst of an unprecedented Buyer feeding frenzy — “up” is often “down,” “in” is “out,” and “down” is “up.” Exhibit A: the Minnetonka home seller who reportedly countered a Buyer $20k below the price offered by the Buyer. Outlier Offer The background: almost immediately after listing their home at $400k recently, the Seller received multiple offers above their asking price. Well above. The presumptive winner? An (over)eager Buyer who offered $450k, leaving their competition (never mind the asking price) in the dust. Done deal, right? Not so fast. Seller’s Counter-Offer The Seller — no doubt counseled by their listing agent — worried that their home wouldn’t appraise at $450k. Instead of taking the deal at that price, they countered the Buyer at $430k — as in, $20k below the price the Buyer offered. In addition to the lower price, the ...

Not every state in the US has the same income taxes! Many states have zero income taxes (Texas) while others have extremely high income taxes (California)! It is not just income taxes that vary by state. Different states have different property tax rates, different vehicle tax rates, different sales tax rates, and more. Income taxes ... Read more from RSSMix.com Mix ID 8230700 https://ift.tt/3vYFP97 via IFTTT

Closing Headaches — Exhibit A [ Note to Readers : The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.] It’s not the biggest mistake Sellers can make — the maximum exposure is typically “only” a couple hundred dollars — but it’s still a headache that can delay if not jeopardize closing. The mistake? Representing that a non-homesteaded home is in fact “homesteaded.” Background What’s the distinction — and why does it matter? At least in Minnesota, the government cum  taxman distinguishes between principle residences . . . and everything else (2nd homes, investment property, etc.). Depending on how you look at it, either the former qualifies for a (negligible) property tax discount, or the latter are assessed a slight premium. In the standard Minnesota Purchase Agreement, if the Seller indicates that the property i...

The “You Know it When You See it” Test While it’s true that every Mid-Century Modern home was built in the 1950’s (or thereabouts), it’s decidedly NOT the case that every home built in the 1950’s is a “Mid-Century Modern.” In fact, in real life, very few are. On MLS, for every home that I see billed as being a “Mid-Century Modern,” perhaps only one in four (25%) really qualify. The rest are more properly described as “inspired by Mid-Century Modern design,” “Mid-Century Modern style,” “Mid-Century Modern influence,” and other adulterated adjectives. Not-So-Telltale Sign: Name Brand Architect So, what qualifies as the real thing? (apologies to Coke). If the home was designed by an architect famous for their Mid-Century Moderns, their firms, or by one of their disciples . . . it probably is. That list includes Joseph Eichler, the Keck brothers (George Fred and William), Henry P. Glass, Ludwig Mies van der Rohe, and Frank Lloyd Wright. Of course, if any of those architects desig...

When the Neighbors are the Dealbreaker Prospective Buyer : “We love the house. But we could never live across the street from that pornographic statue.” Phil Dunphy : “Oh . . . huh . . . I never noticed it.” Prospective Buyer : “Yeah . . . you can see it from inside when you look out the window.” Phil Dunphy : “Oh . . . ahh . . umm . . are you talking about that one?” (points). Prospective Buyer : “It’s quite large.” Phil Dunphy : “I’ll take your word for it.” —-Modern Family; “Marble With Wood” episode. Unlike TV Realtor Phil Dunphy, I’ve never had a listing torpedoed by an obscene statue on the neighbor’s front lawn (this is Minnesota, after all). But, I’ve had sales where the neighbor’s snowmobile(s)/kayak/under-repair-motorcycle was an issue. Sugar vs. Vinegar Step #1 is always a friendly, “We’d really appreciate it if you could relocate your [ _____ ] while our house is on the market.” If the “For Sale” homeowner doesn’t feel comfortable making that request, it’s ce...

Identical or Fraternal? Look closely in the photo above, and you’ll see not one but two trunks at the base of this tree, about 1/2 mile west of Minneapolis’ Cedar Lake in St. Louis Park’s Fern Hill neighborhood. The tree — make that tree(s) — command a key intersection, which give passing motorists (and pedestrians) a treat this time of year. P.S.: a (slim) silver lining to this year’s coolish Spring: the prolonged blooming period — I’d guess 7-10 days instead of the usual 3-4. from RSSMix.com Mix ID 8230700 https://ift.tt/3uNgzSQ via IFTTT

Many people do not realize how much property taxes vary in each state. Some states have property taxes that are ten times the taxes in other states. If you live in a state your entire life you may be used to it but if you move around a lot or invest in real estate in ... Read more from RSSMix.com Mix ID 8230700 https://ift.tt/3nPt2ms via IFTTT

But First . . . a Brief History Lesson I don’t know about other states — I’m only licensed to sell real estate in Minnesota — but here, residential property taxes are due twice a year: May 15 and October 15. Those non-randomly chosen dates stretch back to when Minnesota’s economy — like practically every other state’s — was agrarian-based. The two times a year farmers predictably had money were in the Spring, before they’d planted; and in the Fall, after they’d harvested. Tax collectors ” no dummies about such things ” realized that those were the best times to dun its citizens for property taxes (note: the May 15 payment covers the first half of the year; the October 15 payment the second half*). Debits and Credits Which leaves the more contemporary question, “if you’re selling your house in early (or late) May, do you pay the first half property taxes?” The short answer (or at least mine) is, it depends on whether the Buyer’s lender is escrowing (collecting in advance) for it...

Contractual Assent . . . and a Veto Power [ Note to Readers : The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.] To successfully change the closing date of a home sale, which of the following must agree? A. The Buyer. B. The Seller. C. The Buyer’s lender. D. The Buyer’s title company. E. The Seller’s title company. F. The Realtors (Listing agent and Buyer’s agent). Correct answer: all but “F.” If you think that’s a lot of parties to sign off on a change . . . you’re right! Which is why it seldom happens — especially within 7-10 days of the originally scheduled closing (and especially between April and July, prime time for closings following the super-busy Spring market). Privity of Contract While the title companies don’t get a contractual say in changing the closing — that requires a Purchase Agreement Amendment, signed by b...

As expectant high school seniors (and their anxious parents) know all too well this time of year, colleges have waiting lists. But so, too, does residential real estate. They’re called “backup offers.” First in Line Such offers are increasingly popular in a screaming Seller’s market, for several reasons. For Sellers, a backup offer ensures that if deal #1 hiccups, deal #2 is teed up and ready to go. In fact, that’s the definition of a backup offer: all terms are pre-negotiated, and the Purchase Agreement and all Addenda are signed by the Buyer and Seller. All that’s needed to “activate” the offer is deal #1 formally canceling. Seller Advantages Sellers who have a backup offer in hand need not repeat the whirlwind of showings, second showings, home prep, etc. that accompany debuting on the market. Not to mention going through a second negotiation days (or weeks) after the first one is complete (backup offers are typically negotiated on the heels of the first deal — the notion...

Why “Just Previewing” (Usually) Serves Sellers’ Interests A Realtor showing is when a Realtor takes a prospective Buyer through a “For Sale” home. No competing Sunday open house traffic, no busybody listing agent (representing the owner) present, and — perhaps most importantly — no owner around. The convention is to set up the showing online anywhere from a few hours to a day or two beforehand, and to block out a one hour window (since Covid-19, 30 minutes is now standard in many markets). “Preview,” Defined So, what’s a Realtor preview? When the client isn’t along. As a courtesy to the homeowner, the convention is to allow them to stay put while the previewing Realtor takes a look. That’s significant because the owner can forego the whole “lights-on-vacuum-clean-the-Kitchen-sink” fire drill (that’s only appropriate if the Realtor brings the client back). Practically, previewing can also mean that an owner with a bunch of little kids doesn’t have to bu...

“Wasn’t That House Interesting!” — Compliment or Dis? At least outside of Minnesota, “interesting” actually can mean . . . “Interesting.” As in , “unique” (in a good way), “provocative,” or “stimulating.” By contrast, when Minnesotans say it — especially in the context of house-hunting, and they enunciate the word slowing (“i-n-t-e-r-e-s-t-i-n-g”) — they invariably mean “unique” (in a bad way), “peculiar,” or “unusual” (also in a bad way). Buyers’ agents who don’t want to waste their time are adept at making the distinction . . . See also , “ Minnesota Nice for “Back Off!”?? “; “ Sunday Open Houses & “Minnesota Nice” “; and “ Showing Feedback & “Minnesota Nice. “ from RSSMix.com Mix ID 8230700 https://ift.tt/3h6yCQj via IFTTT