Home Buying · Home equity · home selling · market updates · Uncategorized

Opportunities for buyers? Twin Cities real estate market update!

What is happening in the Minneapolis area real estate market? I’ve been following several metrics over the past few years and there are a few that really stand out to me as indicative of how the market is doing, not just PRICE but what kinds of terms are included in winning offers and I will let you know which terms are revealing the current state of the market here.  

I’m keeping my finger on the pulse of what is happening in the Twin Cities metro real estate market so you can be an informed buyer or seller.

The number one question that most people have about homes is whether or not prices are falling? I keep hearing this and for the purposes of this discussion I’m just going to look at the 7 county metro around Minneapolis and St. Paul and we can check the different housing types. The first is the most popular -SINGLE FAMILY HOMES.  When I was digging into data for this update I decided to look at it over the past year and the past 10 years so that I can show you trend lines for both.  I’m also going to differentiate by new construction and previously owned because new construction is at a vastly different price point as a whole. 

Prices & time on market for existing homes

Metrics that I didn’t talk about in the video are how long houses are staying on the market these days. I do see houses sitting for quite a long time in certain areas and price points but the official numbers are charted here. The graph gives the impression of a big increase in time, but real numbers equate to only 3 more days.

New Construction

I’ll talk about pricing but for new construction I see a lot of opportunity for buyers here! Why? Builders have a lot of inventory right now. They have completed homes as well as homes that are underway with completion dates coming up. They need to get these homes off their books so they can continue to build and the interest rates have slowed things down for everyone, but the big builders are offering rate buy downs for buyers right now along with all kinds of other incentives, from appliance packages to closing costs.

Things to consider are that these homes are mainly being built in 3rd ring suburbs and exurbs so if proximity to the city is important you’re less likely to be able to get a new build – or at least one with a big builder that can offer these incentives. There are custom builds on lots here and there in the city. 

You’ll see a slight dip in median price ($5000) from the beginning of the year.  I have read in multiple sources that they estimate that it would take 10 years of building for the builders to catch up to demand for homes due to the after effects of the housing recession in 2008. We are still that far behind. New construction is showing over 6 months worth of supply but take this with a grain of salt because builders list homes that are TO BE BUILT – so they aren’t existing yet – along with those that they have ready for a buyer to move into. 

New construction supply shows a buyers market! I haven’t seen this kind of number in a VERY long time. Ever? 

Things are different when you look at previously owned homes. It is still a sellers market, although not the insane sellers market of a year or 2 ago. Homes still get multiple offers, the market is still moving just not at a runaway pace. Previously owned single family homes are sitting at about 1.3 months supply. So you can see the difference here. 

WHY is it a seller’s market for existing homes and a buyer’s market for new constructions?

What leads to this? 80% of people with a mortgage on their home are paying less than 5% interest, 50% of them have a rate at less than 4%, they need a big incentive to list their homes and buy a different home with a mortgage at a higher rate. This really is one of those cases where as usual, of you have a good budget you are at an advantage because you can buy new construction and take advantage of the market and the incentives whereas those 2 things don’t exist as much for existing homes, prices are lower as a median but supply is lower too and you don’t get the builder buy downs. But you also don’t have to pay for a deck or the multitude of finishing touches that need to be added to new construction. 

Price reductions

Housing inventory is dropping now as we get into the winter and holiday time, but the other thing that is slowing is PRICE REDUCTIONS – the percentage of them is reduced by about half of what it was 1.5 to 2 months ago, from 14% of listings to about 7%. Maybe agents and sellers are pricing correctly now, or maybe they understand that they may spend more than 5 minutes on the market? 

Bank owned homes

Another statistic of note are the number of distressed or bank owned properties. We still have fewer than 100 listed out of about 6200 active listings. Less than 1.5%, other markets in the US are not faring as well. People here are still meeting their mortgage payments. 

Offer terms that show a big shift

OK – a couple of other things that really stand out to me – the first is that sellers are contributing to buyers closing costs 43% of the time! that’s the highest percentage I can remember seeing. People including appraisal gap language on there offers has almost disappeared (although escalation clauses are still being included) but this makes sense when you see that most sellers are now seeing themselves getting about 99-100% of asking – this number was at 105% or more for a while and that was just crazy. Another option if you are in the previously owned category of home, if you find one you like and it has a motivated seller you could ask for them to do the rate buy down for you. Interest rates have been dipping back down, but it’s doubtful that they will ever get as low as they were during the pandemic. This will likely spur some more buyer activity as we head into spring.

Data on Condos and Townhomes

If you have questions about the real estate market in the Twin Cities area – city or suburbs! – reach out! I love to talk to people that meet me YouTube or the Blog! 

it’s me. 🙂
Home Buying

House hacking!

What’s that, you say?? If you want to buy a home and you want to have someone else pay all or part of your mortgage, this may be the strategy you’re looking for.

House hacking is when you buy a duplex or multi-family home, live in one of the units and rent the others out.

This is a great idea if you are handy and willing to put some sweat equity into a house as well because you can fix up one side and then the move and do the other. Refinance, or simply live there and if you now have an updated rental, you may be able to raise rent and attract a long term tenant.

I especially like this for people that have low down payments – because you are living in the multi-family (up to 4 units) you can qualify for an FHA 3.5% down loan at a higher rate and the lender will take your rent into account as part of your income.

Loan limits on a single family home are $331,760 in MN, and up to $736,450 for a fourplex.

Check out the Bigger Pockets podcast for more real estate investment info. 🙂


Let me know how I can help you!


Home Buying

Who pays a buyer’s agent in real estate?

Did you know that the SELLER pays the commission for the buyer’s agent? It’s true! If you are embarking on your first home purchase, you may be wondering about that and it can feel weird to ask.Buying your first house can be intimidating on a lot of levels, but especially financially, so this is a great benefit if you are on the buy side- you get all of the services of an agent and the seller pays!

How does this work?

When someone puts their home on the market, they negotiate a fee with the agent that is listing their home. Generally, this fee covers the marketing cost of the home (advertising, flyers, listing photographs etc) as well as a commission for the listing agent (which they split with their broker) AND the agent of the buyer (usually called the “selling agent”).

So, if the listing agent charges 6% they will offer some percentage of that to the selling agent as a commission – let’s say that it’s half. If the home is $100,000 that means that the selling (buyer’s) agent will get a check for $3000 at close and they will then split that with their broker at whatever percentage they have agreed to. From whatever remains, the agent will have to put aside 30% for income taxes, some percentage for costs of doing business and then keep whatever is left as income to pay bills.

In my office, the only fee that a buyer pays directly is a $399 administrative fee and that goes to the broker as well. As part of this fee, the records on the transaction are maintained and accessible to the client forever.

And that’s it! If you are a buyer – do not hesitate to find yourself a great agent to help you through the process!


Should you agree to work with a “double agent”?

Let’s talk “agency”, shall we?

If you’ve never bought a home before you might think the best way to go about this is to drive around or check whatever app you use until you see a house you like, and then call the agent on the sign so you can go take a look.

Groovy – I guarantee they will ask you if you have signed an exclusive buyer representation agreement or not. I feel like making a flow chart here, but I’m going to stick to words…

If you HAVE signed with an agent – GREAT call them and let them know you want to see the property. Do NOT call the listing agent. You are having your agent do the job that you have hired them to do! You are NOT bothering them.

Your agent wants to see what you see and see it not only through YOUR eyes, but also through their own. They are there as your advocates and will be looking for anything that may impact your use and enjoyment of the home. In fact, an agent is a “fiduciary” – which means that they are obligated to act in YOUR best interests! Even if it conflicts with their OWN best interests. For example – if the agent were looking for a similar property to the one that you wanted and knew that the property would suit you and that you would buy it – they would be OBLIGATED to make sure you knew about that property even though they may then not be able to purchase it themselves. You want someone like this on your side.

If you have NOT signed with an agent of your own and are walking into that house unrepresented with the listing agent you should be aware of a couple of things – 1.) that agent owes a fiduciary duty to the SELLER of the home – NOT YOU. You’re like a fly that just walked into the spider’s web. 2.) Anything that you say to that agent can and will be shared with the seller!

So if you are walking around the property and you’re beside yourself with joy because this is exactly what you’re looking for! And your budget is 10X as high as this house is priced! Isn’t that great?!? Well, now the seller knows how badly you want it AND that they probably don’t need to give any ground on the price.

But wait! There’s more! If you’re cool with all of that (and there are reasons why you might be) and you go ahead and sign with that agent for the purposes of purchasing that home you need to know a couple more things – one… that agent will “take both sides” of the commission, meaning they get the commission for both being the agent of the seller AND the agent of the buyer.

In addition to this, let’s go back to fiduciary duty … if an agent is bound to only actions that would benefit their client and they are in the middle of a transaction, representing both, they are between a rock and a hard place when it comes time for one of the key functions of an agent – NEGOTIATING and ADVISING. They can give you information about prices and time on market and other stats, but anything that they advise you cannot adversely affect the seller. Tough spot and maybe not where you want to be as a buyer – particularly if it is your first home purchase.

In MN, we are legally obligated to explain what agency relationships mean at the first “substantive contact” with a potential client. No dual agency can occur unless both parties agree to it, and in MN, dual agency means MORE than just the same AGENT representing both the buyer and the seller. This is a twist worth understanding when you are deciding whether or not to agree to double agency in MN – here is applies to any agent working for the same broker. So while I may represent you, I cannot show you a home listed by an agent in my office (my BROKER – not the company) unless we’ve agreed to dual agency. It’s like dual agency lite. Your agent will still work on your behalf, but they aren’t in that middle space between the seller and yourself and they do not get “both sides” of the commission even though dual agency technically still applies.

While agreeing to dual agency may not be right for every occasion it can be right for some. And in the current market in Minneapolis not having access to every home on the market in your price range can be a large detriment to your search. If you’re not comfortable with it and your agent has a listing of their own that is PERFECT for you – you can ask to be referred to a different agent.

Now for sellers… This has happened to me personally when I sold a house in another state, my agent had an open house, an unrepresented buyer came through and wanted the home, and our agent signed that buyer. If we hadn’t agreed to dual agency we would not have sold our home to that person and we were READY to go. So while in the end, we didn’t get too much help with the negotiating, we had already had the benefit of understanding what the market would support for our house and we could negotiate fairly comfortably, but it’s up to each seller to make that decision.

Questions? Comments? Need help with real estate?

Home Buying

Rent or buy?!?!

If you currently rent and you’re on the fence about whether or not to buy I’m going to lay out some pros and cons for your consideration…

Financial reasons…

You’re not spending your money to make your landlord rich. Every payment you make takes you one step closer to actually OWNING your home.

Rents in Minneapolis are averaging $1850 for a 2 bedroom apartment. If you can afford to pay $1850/mo for space in an apartment building and you have good credit, you could afford a home with a price close to about $300K – even with an FHA loan (3.5% down instead of 20%) and including mortgage insurance, homeowners insurance and property taxes. (According to NerdWallet.com mortgage calculator). The average price in Minneapolis is about $280K!

If the house appreciates (increases) in value – that increase is YOURS. This is more than theory, it’s actual equity in your home. This means that if you refinance or need to rid yourself of mortgage insurance ($100+/month if you didn’t put 20% down) because now you DO have 20% equity – you can have the house reappraised and get out from under that monthly bill. Any money that is going in your pocket instead of someone else’s is a WIN.

In addition to that, if you live in your house 8 years and the value increases by $50,000 while you live there – that money is YOUR money. Not a landlord’s!

There are tax breaks to incentivize home ownership. Mortgage interest (and at first that is most of your payment) is typically deductible on your income tax! YAY!

Rents go up… but your house payment will stay the same. Having that stability can be a very reassuring thing when other things are uncertain.

Non-financial reasons…

It’s your home – want pink walls and green carpet? No one will say you can’t do that. You can choose to live in an environment that speaks to YOU.

Privacy… tired of listening to your neighbors walking on your ceiling? Sick of dealing with someone parking over the line in the lot? Next apartment have a dog that barks constantly? If you have your own place, you don’t have to deal with that.

I’m going to add a sense of community here. Something I love about owning a home is being invested in my neighborhood. Knowing my neighbors. Enjoying local businesses. Having my kid have long term friends nearby.

Reasons to continue to rent!

If you need, or like to, move often – owning might not be your thing. It’s more difficult to sell a home than to break a lease.

You’ll be responsible for maintenance and repairs – if it’s a single family home that likely means lawn mowing and possibly shoveling. If something breaks – you have to find someone to fix it. I recommend learning to do as much of this yourself as possible – it feels good to be able to take care of your own home.

If you have a lot of debt – you may wish to take the time to pay that down before jumping into home ownership. Having less debt when you apply for a loan is a positive and can pay off in the long term.

Do you have questions about the home buying process? Let me know. I like helping people out.


Buying your first home EVER! Gimme the keys!

You found a house! Your offer’s been accepted! Clear sailing from here on out, right?

Well, maybe, but you should know what comes next.

Earnest Money

As part of your offer you will submit a deposit, called “earnest money” (I did a video on that – check out my YouTube channel if you’re interested.) It’s basically putting some skin into the game so that you have some incentive to adhere to the terms of the contract and perform the duties that you are committed to on the schedule that you’ve agreed to.

You need to meet the deadlines and SO DOES THE SELLER. If you don’t, there is the potential that the seller keeps your earnest money and the house goes back on the market. If they don’t or the contingencies around inspections, appraisals and loans aren’t satisfied, you can break the contract and have your earnest money refunded.

Inspection and Appraisal

Well, as part of the purchase agreement you’ll negotiate some terms, like an inspection, the fact that the your financing depends on the home appraising for the amount you’ve agreed to pay, that you can have your financing approved and ready to go by a certain point in the process.

If you decide that you are, or the seller is, willing to fix whatever is discovered in the inspection, or if you can work out a credit to the price to compensate for the issues (and there are ALWAYS some issues!), the process keeps moving – if not, you can ask for a refund of your earnest money and look for something else.

At the same time, the lender is completing your loan approval. You’ll want to be very responsive to your lender as they request documents etc, because missing a funding deadline can either delay closing or put you in breach of your contract enabling the seller to keep your earnest money and sell to someone else.

As a part of obtaining financing the lender will also order an appraisal of the home. The bank wants to know that the collateral on their loan (the home) is worth what they are lending you and they will be able to sell it and recoup their money if you default for some reason.

If the home does not appraise for the amount that you’re borrowing, a few things can happen. You can renegotiate the price downward to make up for the difference, you can come up with the cash to make up the difference, or you can walk away if the financing contingency is not met and specified in the contract.

On the flip side, homes have been known to appraise for MORE than you’ve agreed to – in this case it’s like you’ve been given a prize because it’s effectively instant equity in the home that you didn’t have to wait or pay for. Yay!

Title search

While your lender is working on your loan, you’re having your inspections done and the sellers are making their repairs, the title company is doing a search to make sure that the title is clean and there are no other claims on the home so that you can take possession at closing. When you get to the closing table you will be encouraged to buy title insurance, and that is a very good idea! Should something come up in the future, you’ll be protected.

Walk through…

Now it’s getting real!

The night before or the morning of closing, you will go to the home and take a walk though. You’re looking at the condition of the home to make sure that everything you expect to see there is present and in the right condition, that the home looks the way it should and that when you sign the papers and the home becomes yours that the house is the way it should be.


Your lender will let you know to the penny what you need to be prepared to bring to the closing table financially. They will also tell you how that money will be transferred – often it is simply a wire transfer from the bank.

You’ll sign a lot of loan documents that reaffirm the interest rate, dollar amount, how much the loan will cost you over the term, how long the term is, when payments are due etc etc. And, if you are in MN, you will leave with a set of keys to your home because you take possession immediately unless you’ve agreed to another arrangement.

Last thing!

If you will be living in the house, do NOT forget to file for your homestead exemption!! This is a big discount on your property taxes because you’re occupying the house. You’ll get this info at the closing table, but make sure you put it on the top of the pile so that you don’t forget.

And now you own a home! Congratulations!

Home Buying

Buying your first home – Part 2!

Once you have determined that you are financially ready, you’ve selected an agent, and you have that pre-approval letter in hand, you are ready to start looking!

See what is out there…

Many buyers will have already started looking at what is on the market via online real estate sites, Realtor.com, etc, but be cautious with Zillow! It is notorious with agents for having very outdated or inaccurate information. People often find listings on Zillow that are under contract and not available or have not been taken off the site despite being sold.

You’ve selected a realtor, hopefully you had a conversation about what things you MUST have – how many bedrooms, where the home needs to be located, if it needs to be single level living, etc, so let them send you listings. You decide how often you want them – Immediately? Daily? Weekly?

We have access to the MLS and the information on there is ACCURATE. You won’t be looking at homes that aren’t available. We can select very specific areas via a drawing tool on a map, search by commute times to and from your job at particular times of day, add or eliminate homes based on very specific criteria that is important to you – patio space? Gym in a condo building? Access to a pool? Main floor bath? Let us send you what YOU want to see.

Understand how the market is behaving…

Buyers should look for a home that fits the 80/10/10 rule – 80% of what you love, 10% that you can change, and 10% that may not be your favorite but you can live with it.

Your agent can help you learn what the market is like in your area – is it a buyers market or a sellers market? What percent of asking price are sellers able to get on their homes? How long is it taking for sellers to get their homes under contract? Do sellers typically contribute to closing costs?

Realize that depending on the market you may not get your offer accepted on the first home. At this moment in Minneapolis, anyone buying a home under about $350K can expect to have some competition on their offer and also needs to be prepared to act quickly. In other words, it’s a sellers market and your best bet is to make the most attractive offer possible.

Head out and view properties!

Finally – start looking with your agent. Plan to give 24 hours notice if at all possible. Selling is hard – people want to clean, they may have kids and dogs they need to take somewhere, it’s just courteous. Best case scenario they have moved already and the home is available to show as needed, but be prepared to give some notice.

Do you have questions? Click one of the links below or leave a comment!

Home Buying

Do you need 20% for a down payment?

An FHA loan may be the key to home ownership!

I think this is one of the greatest misconceptions that people hold about buying a home – you do not need 20% down to buy a home!

I did a video on my channel that talks about why an FHA loan may be a great choice if you don’t have 20% to put down. The federal government has long encouraged home ownership and this is one of the ways that they help people get into homes of their own.

FHA all the way!

If you’re thinking about buying a home and you want to learn about the process you can download my free home buyers guide, it’s a link in the description below the video.

If you are in Minnesota and you’re interested in downpayment assistance contact me and I can help you find resources on that.
Minnesota offers up to $15,000 in down payment assistance so it’s a great
resource if you’re looking to get into a house and you don’t have that large down

Here is why the FHA down payment requirement might make this the right loan for you if you don’t have a large amount of money to put down on a new home…

What is an FHA loan? Well, an FHA loan is simply a loan that is insured by the federal government and it enables people without a lot of money or with less than stellar credit to get into a home in a less expensive way and the price that you pay for that, “the catch”, is that you have to get something called PMI. Private Mortgage Insurance.

It’s required on all FHA loans.

You do not have to be a first-time homebuyer in order to get an FHA loan. The requirements of an FHA loan are as follows:

It’s billed as as little as three and a half percent down and, that’s true, but you should plan to have about six percent of the purchase price of the home available because
you’ll have that three and a half percent that you’ll put as a down
payment and then an additional two and a half three percent that would go toward
closing costs.

Now in Minnesota often we get the sellers to pay about three
percent in closing costs but they are not obligated to do that. So if you
have that money available it just strengthens your ability to purchase
that home.

Before you get an FHA loan:

First the lender will need to verify your income and they prefer to see two years
employment, hopefully in the same field
. They’re going to ask for pay stubs and
verification of income.

The mortgage amount that you are able to borrow – the payment on that amount- needs to be less than thirty five percent of your income. And your total debt payments (car loan, credit card, student loan PLUS mortgage) must be less than 48 percent of your income.

In another video I talked about things that you could do to get ready to buy a home and one of those was paying down debt. Another thing you could do is consolidate debt so that you have one payment at a relatively easy interest rate and just make sure that you’re always, always on time with your payment.

Check out the home affordability calculator linked in the video. It’s going to tell you if you can qualify for an FHA loan based on what your payment’s are today. One of the other qualifications that they like to see is two lines of credit so if you have a student loan perhaps and a credit card or a car payment they’ll look at those two lines of credit and check out your payment history and make sure that you are a qualified risk.

Then there is your FICO score. Your FICO score is the credit score that lenders use to determine whether or not you’re credit worthy and you can get a hold of that in your annual free credit report where you can look out there and see what things are maybe pulling your credit score down, what things you could pay off, maybe things that you have paid and need to dispute. That is free – you can get it every year.

One of the last qualifications is how much you can borrow. In 2020 they have changed the amounts that you can borrow. In the Minneapolis metro area you can borrow, this is the actual loan amount, up to $382,950 on a single-family home.That’s a that’s a pretty large amount to take out as a mortgage and you’ll have a lot of options especially if you were to be in the northern part of the city or the suburbs that could buy you a lot.

Then there’s the even a better option, in my opinion, which is if you wanted to do a “home hack” which is this idea of buying a two family home and moving into one side of it and renting the other. You can borrow up to $490,250 and then they would account for that rent on the other side as part of your income and you can, depending on your situation if you get into the right one, be paying most or all of your mortgage through the rent on the other side of your house. It’s a good way to get your foot in the door and build some wealth!

Questions? Leave a comment or tap one of the icons below. 🙂

Home Buying · Uncategorized

How long does it take to buy a home?

If you have never purchased a home before the whole process may feel like a big mystery.

Stop by my YouTube Channel for more info on real estate & living in Minneapolis!

It’s something most people don’t do more than a few times in their lives and it’s the biggest purchase that you’ll likely make in your life. Well, good news! It’s not as complicated as you may think!

6-12 months from your purchase…

To answer the question “How long does it take to buy a house?” though – the answer is “it depends”! Don’t you love that? It makes me think about when I was a kid and wanted something – “Mom! Can we…?” “It depends…”. Ugh.

Well, one of the most important first steps is getting ready financially. If you have a good credit score (700+) you’ll likely not have a problem getting a mortgage. Many people have some work to do here first though. That means that you need to find out what your FICO score is (you are entitled to a free credit report annually at AnnualCreditReport.com). When you see your report there may be things on it that you want to dispute because you’ve paid them. You can also see what debts you owe – the goal is to get your debt to income ratio low. Lenders want the sum of your payments to creditors to be under 43% of your income for TOTAL payments – including your mortgage!

You’ll also want to make sure you have money for a down payment (minimum of 3.5% of the purchase price) and potential closing costs (2.5 – 3% of the purchase price) as well as cash on hand for things like home inspections and any deposits you may need for services, plus moving expenses.

If you need assistance in finding a loan officer that can help you find the best mortgage for you, ask a realtor! We work with them ALL THE TIME and typically know who is reliable, provides good service and has a nice array of loan products that they can offer you.

If you are a cash buyer, your timeline will include inspection and title search, but you can close FAR more quickly.

3 months from your purchase…

OK – that’s the hard part over! NOW you can start looking for a home. Because you have your finances in order, you know what you can afford. And your agent will know what you can afford as well! While it is a lot of fun to look at homes that are super fancy, if you can’t buy them… it’s a waste of time.

Finding the right home can be really fast or not as much. Some of that depends on you, and some is dependent on the market. As I type this, in Minneapolis, it is 110% a sellers market for anything under $350K. Homes are going quick, and inventory is low, so you may be outbid if you find one or there simply may not be a home available that meets your needs. However – you’ve done your homework, you have financing lined up and a down payment ready so when you find something you can submit a strong offer and push yourself to the top of the pile!

6-8 weeks from move in …

You find a home that you LOVE! You submit an offer that is attractive to the seller and you are prepared to close with! They ACCEPT!!

You will submit your earnest money (I have a video on that on my YouTube channel!) Typically, in Minnesota, that starts the clock on the inspection period. Frequently this is 10 days in which you have the opportunity to have a home inspector look at the house and give you an idea of what you are actually buying and if there are “material facts” that would inhibit your “quiet enjoyment” of the home. In other words – is there anything alarming that should be fixed before you can safely & comfortably inhabit the home?

Inspectors find things. If the items they find are things that you are willing to fix yourself, then ok. Or you can request the sellers fix it or rebate some of the purchase price so that it can be fixed in the future at no cost to you. If you cannot come to an agreement you can cancel the contract but you’ll be back to the house search stage … I need a flow chart in here. 🙂

30-45 days from move in …

Most lenders can get your loan underwritten and ready within 30 days. During this same time, a title search will be conducted and the sellers will complete any repairs agreed upon. If you have an FHA loan it can take an extra couple of days.

So! How long does it take to close on a home? It can be as little as a week or two for a cash buyer or as much as a year if you need to get your financial house in order. It’s all dependent on preparation on your part and being ready to make a clean offer.

Have a question? Leave a comment or tap one of the icons below.