Ask the Patch Pro: All About Real Estate

Matthew Johnson July 18, 2012 at 01:11 pm

A good time to buy.. you better believe it! Affordability is the best we've see in 50 years (since they began tracking) and sales on the rise with new construction increasing all signs point to an increase home prices over the next few years!

Dylan Niska July 18, 2012 at 01:21 pm

How can I find out what my house is worth?

Matthew Johnson July 18, 2012 at 01:32 pm

That's a great question Dylan, The quick and easy option is a comparative market analysis from a real estate agent. The next step if you are looking to refinance or need something with more detail is a home appraisal. This can cost $300 to $400. Hope this helps!

Jolene S. T. July 18, 2012 at 01:34 pm

Do you think townhome prices will rebound? It seems like only single-family homes are experiencing a recovery.

Matthew Johnson July 18, 2012 at 01:42 pm

They will, but it takes time Jolene. Townhomes will always ride the wave of recovery following single family because people typically desire their own 4 walls and will go that direction when it's affordable. When the market began to shift down condo's got hit first with townhomes close behind in late 2005/ early 2006. According to the media the sky was not falling until single family homes felt the pressure mid to late 2006. Our housing recovery will follow a similar path on the way out with SF homes now, TH's in a year or so and condo's. Same thing happened in the 70's and late 80's. I have been reading up over the last few years on what to expect with our recovery in the Twin Cities.... the question is... do you want to buy another home and will it be affordable when you are ready to move?

Kris Janisch (Editor) July 18, 2012 at 02:01 pm

When do you think the tipping point will be for good time to buy vs. good time to sell? Or does it just depend on the city?

Matthew Johnson July 18, 2012 at 02:33 pm

It depends more on your intentions, moving up to a bigger home or higher priced property would be best now. Selling with 30% off your $200,000 home and buying a $300,000 that used to be $375,000 at the same monthly payment could be a great thing!

Matthew Johnson July 18, 2012 at 02:36 pm

Of course real estate is always local, moving across town or to another state could change things. For instance, the majority of the country was going down in 2009 but because of affordability and job opportunity and economic conditions things were going up in TX!

Chris Steller (Editor) July 18, 2012 at 03:11 pm

Any observations on effects within a local real estate market after developers build assisted-living housing for senior citizens?

Matthew Johnson July 18, 2012 at 03:22 pm

Hi Chris, Although I have no data or reports to back it up the my initial thought is that it can only help values. Our seniors need affordable housing options and still wish to remain close to their children or grandchildren. With the housing bust this segment of the population has not seen the development needed to keep up with demand.

Andy Johnson July 18, 2012 at 03:44 pm

Do real estate agents get "kick backs" from home inspectors they refer?

Matthew Johnson July 18, 2012 at 04:04 pm

Great question Andy, I can not speak for all agents but I would never accept such compensation. Every service provider on my recommendations list must first prove their ability and justify their value. And... quite frankly the $ just would not be worth it. Such compensation is also illegal in certain parts of the industry!

Brad Butala July 18, 2012 at 04:11 pm

It would be a violation of RESPA

Matthew Johnson July 18, 2012 at 04:20 pm

I don't know that home inspections fall under RESPA guidelines. Let me contact my legal services.

Andy Johnson July 18, 2012 at 04:40 pm

What are your thoughts on the house rental market in Woodbury? Do you have any insight into the "rental/tenant" pool? For those of us who bought at the peak (2005) and want to take advantage of a move up home, selling may not be the best option given the amount of money needed to close on the sale as well as a down payment (at least 5% needed I'm hearing) on the new purchase. What are your thoughts on renting vs selling?

Brad Butala July 18, 2012 at 04:56 pm

Matthew-
It is a slippery slope as the home inspection is for the borrower's protection, although not required but sometimes they are for the loan purposes. If it were required by underwriting it would then indeed be considered part of the settlement services and be in violation of RESPA.

Matthew Johnson July 18, 2012 at 05:01 pm

You must be in the mortgage industry Brad, thanks for sharing! I guess I made the mistake of assuming it was just a general inspection in which case would not be tied to the mortgage directly. Still looking for a solid answer but a slippery slope indeed!

Matthew Johnson July 18, 2012 at 05:03 pm

Renting is a tough propositions... trust me I used to be a landlord! I know demand is huge for rentals right now and you should have no problem finding a tenant... at the right price. So would it cover your monthly payments or better and not "bleed" you to death over time? That is the question... I've also had tenants cost me $10,000 in a matter of weeks. That is no fun.

Brad Butala July 18, 2012 at 05:05 pm

Yes, have been for 10 year :)
Also to add for Andy above, 3.5% is the min. downpayment needed via FHA, seller can contribute up to 6% for closing costs but typically industry norm on most purchase agreements are 3%. I am done now, sorry for the hi-jack but just wanted to share some input.

Matthew Johnson July 18, 2012 at 05:09 pm

Not to mention the FHA rates are typically better than the conventional products so it's likely a better option than the 5% or 10% correct? I appreciate your input!

Brad Butala July 18, 2012 at 05:09 pm

Sorry Andy you were talking about rentals, I responded in regards to single family not non-owner occupied. Most lenders are typically (20%) down on NOO today.
sorry for the confusion

Brad Butala July 18, 2012 at 05:25 pm

Matthew, yes the rates for FHA loans are currently lower than conventional and have less strict score requirements. However each individuals situation in regards to mortgage insurance will be different depending on the credit score for conventional whereas even with the recent increase to the up front mortgage insurance premiums and the increase in annual mortgage insurance of FHA will be the same for all borrowers. Both options should be explored given the scenarios and the buyers intentions.

Caitlin Burgess (Editor) July 18, 2012 at 06:21 pm

What about staging? My dad is getting ready to put his home on the market. It's an old house (like built in 1918) and there is some work that needs to be done. The landscaping is great, fresh paint on the outside, but he's lived there for 35 years and I know I need to reduce the clutter and make it clean. What are the important areas to show off? Kitchens and bathrooms?

Matthew Johnson July 18, 2012 at 06:32 pm

There are certainly options regarding staging, starting with basic furniture arrangement all the way to knockdown / open up remodeling. What's right for your situation depends on several factors including Return On Investment. The guidance of a great real estate agent can be the determining factor on if the house sells and for how much! De-cluttering and paint/carpet can be great because of the low cost and while kitchens and baths give the best ROI according to Builder / Remodeling Magazine they are also very expensive. I am always happy to stop by for a 30 min consult with no obligation or fee. I did this for a family who had their home struck by lightning this spring and they planned to sell in a couple years. It gave them direction in the fix up and where to invest for the best sale possible!

Linda July 19, 2012 at 11:40 am

Is it true that in 2013 the sale of your home will be subject to a sales tax?

Matthew Johnson July 19, 2012 at 01:27 pm

Hi Linda, it's only to gains above the exclusion levels ($250k single / $500k married) if you have a pretty healthy income..... Will not affect many transactions. Don't believe the hype!