New Hope!

July 16, 2021 MaryLeave a comment

Another surprising community! Today I’ll show you around New Hope MN and give you all the reasons you may want to consider living there.

Lately I’ve been working with several first time buyers, and if you remember buying your first home you probably didn’t have a massive pile of money for a down payment as many people who may have equity from a sale do, so you have to look for a starter house in a more affordable neighborhood.

That’s where New Hope comes in! A quick look at what is on the market right now illustrates my point – there are 30 active homes in New Hope ranging from a 1 bed 1 bath condo for $115,000 to only a few homes in the mid-upper $500’s with MOST homes being single family homes in the upper $200,000’s to mid $300,000’s. The MEDIAN price in New Hope is at $309,000 whereas the Twin Cities Median is at $380,000.

If you’re an investor and want to rent out a residential property you must register the property with the city.

In addition to single family homes and people just starting out in life, New Hope makes senior living a priority as well. They have 3 long term care facilities, some assisted living complexes and senior citizen apartment homes.

elderly couple holding bouquet of flowers while holding hands — Photo by RODNAE Productions on Pexels.com

Let’s talk Property taxes… New Hope is in Hennepin County, the effective property tax rate in New Hope is 1.35%. Hennepin County’s portion is 1.28%, the effective tax rate for the state of MN is 1.08%. Sales taxes since I looked this up as well – MN has a sales tax rate of 6.88% on everything except (I believe!) food, prescriptions and clothing, and the sales tax rate in New Hope is 7.13%.

tax return form and notebooks on the table — Photo by Nataliya Vaitkevich on Pexels.com

The beauty of New Hope is not only the affordable home prices, but that New Hope is actually a really lovely community and it has a lot to offer.

New Hope is an easy commute to downtown or the airport. It’s only about 20 minutes by car to downtown. and Because I’m such a fan of our regional parks I also want to point out how close New Hope is to the beautiful Theodore Wirth Park. I touched on this park in my Golden Valley video (which you can watch next!) but Theodore Wirth really has it all. It’s just gorgeous, and can keep you busy outside no matter what season we’re in.

If you are leaving town or going to fetch a visitor, it’s about 26 minutes to MSP airport and while you’re down there you can stop by the Mall of America and get your shopping done or amuse the kids on the roller coasters. I was a major skeptic because I am not really a “mall person”, but I like “The Mall”! It has so many great stores that you don’t see everywhere else, some nice food options and my kid and I had fun doing some of the rides the first time we stopped in. Being close to it is nice because it can just be something you do for an hour or two and you don’t have to feel like you need to spend all day there since you can go back any time. The Ikea is right next to the mall as well, so if you like. Swedish Meatballs and cryptic assembly instructions for affordable furniture that utilize allen wrenches – you’ll be in heaven!

New Hope does NOT have it’s own school district, all schools in New Hope are part of the Robbinsdale Schools aka ISD 281. It’s a pretty big district with 10 k-5 elementary schools, 2 middle and 2 high schools. I always recommend that you do your research and see if the school district that your home is in is one that you will be happy with. You can check out Niche.com or GreatSchools, but another option is to actually VISIT the schools and talk to the administration and see things for yourself.

Speaking of brain food… New Hope residents have convenient use of 3 branches of the Hennepin County Library system. They can easily access Brookdale Library in Brooklyn Center, Golden Valley’s adorable little library, or the Rockford Library in Crystal.
One of my favorite topics when giving community profiles is the park systems. I just think green space improves the quality of life for everyone. New Hope agrees! They are a small city (only about 21,000 residents) but they have 18 city parks and several other venues offering all kinds of recreational activities including:

the new Hope aquatic center which is a community pool and water slide
2 off leash dog parksa 9 hole public golf course
disc golf course
ball fields
a skate park
tennis / pickleball courts
Community gyms with basketball courts that can be rented out for the day
and 3 outdoor skating rinks that are open in season.

sunflowers on rack with price tag near orange canopy tent — Photo by Daria Shevtsova on Pexels.com

The city hosts a Farmers Market on Saturdays from the middle of June through the middle of October at City Hall.

Lastly – Pets & fencing. Everyone’s favorite topics!

winking black and brown puppy — Photo by Dominika Roseclay on Pexels.com

New Hope allows for a LOT of pets – 3 dogs, 3 cats and 3 “other” household pets, as well as 3 “fowl”, This is not restricted to actual chickens – if you want ducks instead – go crazy!
All dogs, cats and ferrets need to be licensed and vaccinated for rabies.

Fencing – IS ALLOWED! 🙂

OK – that is ALL I HAVE on New Hope! It’s a lovely community that I feel lucky to have worked in lately. It offers a lot of great options to people that may be priced out of other areas of the city. It’s 100% worth considering if you’re wondering where to live in the twin cities metro.
If you like this kind of content – I have an entire playlist of neighborhoods/suburbs on my YouTube Channel that you can look at to see what feels right for you.

Thanks for stopping by!

March Real Estate Market Update

April 2, 2021April 2, 2021 MaryLeave a comment

My last post & video about this were pretty well received, so even though numbers aren’t flashy, I’m going to try to make this a monthly feature as we navigate through this crazy market. This post has some good little nuggets in it if you’re in certain segments of the market, so stick with me.

A bright spot for buyers?!!

Last time I posted about the market I gave an overview of “absorption rates”, this is going to be a recurring theme, so if you want to check that out you can find that post here: https://twin-cities-living.com/2021/02/26/i-had-other-plans-for-this-weeks-post/

There is an obvious lag in the data because we need to look after homes close and that shows up in the MLS, but I do get some data relatively quickly thanks to Minnesota Transaction Coordinators, a company that helps many of us with processing our transactions.

Let’s start there with their analysis of terms that they see in contracts.

Inspections

In the past couple of months we’ve seen quite a few buyers deciding to waive the inspection in order to release one more contingency ahead of everyone else. By “a lot” I mean 38% of buyers were waiving inspection in the first 2.5 weeks of the month, but when they looked at the first through the 26th the rate went to 31%. That means that enough people have STOPPED waiving them to lower this percentage by 7%. Buyers are insisting on protecting themselves and sellers are acquiescing to that.

Offer acceptance rates

Even better, offer acceptance has gone from 31% for the month last week, to 39% for the month over all as of the 26th. YAY!!!! Sellers are accepting offers! I represent a lot of buyers and it has just been TOUGH. So this is great news.

Homes listed on the open market vs witheld

In an office as large as mine, we often hold listings off market and only market to agents within the office. This shrinks the pool of who looks at the house which is desirable for a lot of reasons – from Covid, to privacy, to simply wanting to not have to deal with the preparation and hassle of selling on the open market. Sellers can name their terms and if another agent has a buyer that can meet those, there is a happy meeting of the minds without all of the associated prep work, exposure, etc and everyone feels satisfied. The number of sales that they have worked on in this status is down to 5.6%. This is good because more homes are hitting the market than have been.

Percentage of list price received

Current purchase price to list price ratio is “down to” 104% from 105% last week. It has been hovering between 103% and 105% in the past couple of months. It’s good to have that number in mind, even though it’s not a fixed price, it’s an idea of what you should think about when offering on a property that has a lot of interest. Price is not the entirety of a an offer, there are a lot of other terms that need to be in line as well, but this is good info for this metric.

Seller paid closing costs

26% of deals include some seller paid closing costs. I have to assume in this market that the offer price was increased to account for these, but I like that we are seeing it because it means sellers are accepting these terms.

Forms of financing

76% of loans are conventional (you do NOT need 20% down for a conventional loan! These are viewed as more favorable and if you can get a conventional loan it’s one more check mark on the list of terms).

FHA loans represent 10% of the offers, CASH 10%, and VA & USDA loans are at 4%.

Traditionally, inventory really increases around this time of year (inventory = homes being listed and available for sale). We currently have less than HALF of the listings we had 6 months ago.

Good news for downtown condo buyers!

Downtown condos are in a balanced market right now! If you are looking for a condo in the central city including neighborhoods like Loring Park, Downtown, University, Dinkytown, Elliot Park etc… now is the time. We believe that this is caused by the pandemic and people wanting to live in less dense housing + fewer people needing to be downtown for work, but don’t expect it to last with the speedy rollout of vaccine and life returning to somewhat new normal.

Days on Market are up to 41 (only from 38), but these are the kinds of indicators that let buyers know that they will not likely have to pay more than list, that sellers will be willing to negotiate because they know you can find another condo to buy and someone will play ball with you.

So that is what is happening! Sellers are still mostly in control of things, but if you’re a downtown condo buyer you’re in the sweet spot!

Let me know if you have questions.

Uncategorized

Waconia

August 22, 2020 MaryLeave a comment

I don’t know why I’m consistently surprised every time I profile a community, but I seriously underestimated Waconia. I think in this case I may have had a bit of urban arrogance… 😉

Waconia is a small community – only about 11,000 people – and it is 30 minutes directly west of Minneapolis. It’s kind of on the edge of Twin Cities development and there are still farms and fields on the way there and more so as you head west. I did not expect it to be able to offer all that it does!

Waconia has a charming downtown area that is still alive and kicking – businesses were busy when I drove through there on a Wednesday morning. I didn’t notice any vacant store fronts- something that breaks my heart when I drive through small towns. The downtown sits just off Lake Waconia and has the classic central square with the gazebo and a playground.

I’m always interested in parks, schools, libraries, and what things the city offers it’s residents – Waconia scores well on all of these things, plus a lot more.

The location on the lake is a huge plus – Lake Waconia Regional Park has a beach, geocacheing, sled hills, cross country ski and snow shoe rentals for winter fun on the trails. Waconia is a small community but it has has 3 community parks and 18 smaller neighborhood parks.

For such a small town, I was surprised at the amenities offered by the city – Safari Island (the name confuses me a bit, why SAFARI in Minnesota?), has an indoor aquatic center, fitness center, running track, basketball courts, and a kids play area. Hockey & ice arenas are a big deal here, and Waconia is keeping up with the Jones’. You won’t be deprived of your ice time here – and if the prices listed on their site are accurate, it’s super affordable.

Waconia has 3 wineries, a distillery, and a brewery that hosts food trucks or allows you to order or bring in your own food. If alcohol isn’t entertaining enough for you check out Carlson’s Lovable Llamas. Don’t say that there isn’t variety!

There is a wide variety of housing in Waconia – townhomes, and twinhomes, older single family homes near the center of town – either historic, character type homes or more mid century as you move outward a bit. On the outer edges of town are newer subdivisions with large modern homes on smaller lots. The least expensive home for sale in Waconia today was a 3 bed, 2 bath 2015 townhouse listed at $280K, and the most expensive single family home is a brand new lake adjacent build listed at $1.345M, but the median SF home price in Waconia is $340K, so higher than the twin cities median of $290K, but I would say lower than other western suburbs.

Niche.com gives Waconia schools an A rating, so if you have kids, there is lots to do between the parks, lakes and llamas, and they will likely make it out of school with some knowledge stowed between their ears.

mschumann@kw.com

612-234-5703

Uncategorized

Wildflower neighborhood ~ Eagan

August 15, 2020 MaryLeave a comment

I have previously expressed my lack of enthusiasm for cookie cutter neighborhoods. This one isn’t QUITE as unique as Cobblestone Lake (see my last post), but it definitely has it’s charms.

It’s a small neighborhood right near the most beautiful park in this part of the metro area – Lebanon Hills. I feel like I sing the praises of Lebanon Hills every other video / post at this point – but it’s a really nice park! I like parks, sue me.

The homes are all a similar style – 3 or 4 level splits, but the neighborhood is established enough to have mature trees, and people have lived in the homes long enough to have made changes to them.

I also didn’t think I loved split level homes, but it turns out I love THESE split level homes! I’ve been in two of them recently with clients, and both had the same kind of cozy feel – not necessarily SMALL, but because of the nature of the 4 level split it has a smaller footprint and goes up one level, and down TWO levels. They seem to go on and on. I’m one of the rare breed (or silent majority?) that likes a home with WALLS. I’m not opposed to a certain level of openness, and I think high ceilings add a lot (these have them!), but when you have more than one person living in a house, it’s nice to have a separate space that isn’t a bedroom that you can go to and still be OF the house but not necessarily right in the mix. If you’re living in MN, you will also appreciate that they all seemed to have fireplaces for winter coziness and beautiful back yard landscaping – either a deck or a patio – to enjoy the summer and fall.

The neighborhood has a really interesting layout – every street is a cul-de-sac! Until I had a kid I didn’t realize exactly how much I would like a cul-de-sac. The only traffic on any one of the short streets has a purpose for being there, there aren’t ANY cars using the neighborhood as a shortcut and there is only one way in or out, and that way has a bike/walking trail running right down the middle of it.

One of the homes we looked at backed up to the shopping area on this map – at first it was a little startling and we thought possibly not a great idea, but who hasn’t been one ingredient short when making dinner? it was quiet, and the walking/bike path continues from the entrance to the neighborhood on Lexington Pointe Parkway straight back to the shopping area. If you feel like heading over to the Eagan Arms Public House or Theresa’s Mexican restaurant – easy peasy!

If you have kiddos, they can take that same path over to Northview Elementary or Dakota Hills Middle School. Both have “A” grades on Niche.com.

Last but not least – it was apparent that this neighborhood had an active HOA. While it didn’t seem to revolve around ridiculous rules about the color of your curtains, the fees paid in went to maintaining the beauty of the neighborhood – either the abundant gardens lining the entry to the neighborhood, or the neighborhood mailboxes.

The three times I was in the neighborhood I saw people out walking and enjoying time with their neighbors. It just felt like a really welcoming little community.

Right now, single family homes in Eagan have a median home price of $341,000. They spend very little time on the market and they get at least 100% of their asking price.

Have a question about a particular suburb or neighborhood? Let me know!

mschumann@kw.com

612-234-5703

Home Buying

Buying a home – online!

May 17, 2020May 18, 2020 MaryLeave a comment

Dr. appointments are held via telemedicine & Zoom calls. My cousin just ordered a CAR online and had it delivered to her house. You may now be buying your groceries online for delivery or curbside pick-up. We also buy just about everything from Amazon, pajamas for my kid, water filters for my fridge, I’ve even ordered a new antennae for my old VW Beetle from Amazon! We read a lot in our family and the libraries are mostly closed with some drive up options, but now we do kindle and download (I know that’s old hat, but it’s a new way for us).

Would you ever consider buying a home online?

This topic likely could have been one of the first that I put on my blog, but sometimes you do something so much that you forget that it’s unusual! Covid is bringing a lot of attention to it right now – a friend sent me a copy of this article in the Wall Street Journal about the fact that buying without seeing a home in person has gone from 3.5% of agents saying that they have done a contract this way to a whopping 31% in April of this year! All I could do was nod my way through it.

Buyers do this when they are in the military, moving from overseas, or simply relocating from another state. Obviously at any point a visit is welcome, but if it’s not possible then there are ways to make it work.

I know people start shopping for homes that way – they like to visit the big online portals for listings so that they can see what homes are for sale, see pictures, get information on taxes and prices etc.

I have a good understanding of the difficulty of relocation because of my personal history of moving from state to state for fun or job relocation and also knowing how hard that was without being able to piece together what life looked like – most especially when I moved to Minneapolis from Chicago, which had much higher stakes for us, we had a kid changing schools, no family here, homes to sell and buy…

I started my YouTube channel and have focused a lot on showcasing neighborhoods and homes of every price and type, as well as trying to show a bit about what life is like here in Minnesota.

I thought I would help people like me.

And I *AM*!!

I regularly get calls or emails from people that are moving to Minneapolis for work, school, medical care or just because they want to, and they are coming from every part of the United States and across the world. They may be thinking of renting at first or may also be ready to buy a home here.

So, how do you buy a home from a long way away? Well, it’s definitely not the same as when you’re here in person, and the most important thing is to find an agent that you can trust. Agents always act as your partner in the purchase of a home, but when you are buying from a distance this is far more important. Your agent will be able to give you the information that you need before making a decision. This can be data on sales, rising and taxes, information about what schools are there, to just being able to provide you with video and commentary on what is in the area.

A very important aspect is that you are very open and clear with your agent as to what you prefer and what things are important to you in a home. I’ve had clients that were very specific about wanting 2 acres of property in the south suburbs, to those that prefer a high rise in the heart of downtown and everything in between. For out of town clients I preview all homes for them and take a video tour. In some cases, I’ll look at anything available in their price range that meets their criteria – listings sometimes aren’t enough to decide. More than once I have bought a home that I didn’t even think I wanted to see based on the photos. If nothing else, this gives a very clear picture of the competition and a better idea of what to offer once you’ve narrowed down your choices.

You’ll still need to do all the basic things like get pre-approved for a mortgage (easily accomplished ONLINE!) so you know how much you can afford to buy. But after your preferences and budget are clear I generally try to do the following:

Set up a search on the MLS for you. People generally seem to love Zillow, but I believe that is probably because it’s what is available and people are used to it. It is also notoriously inaccurate. The best thing to do is to have an agent set up a search that meets YOUR criteria. This can be very specific – certain streets, specific layouts (ranch, 2 story, town house…), school districts. This is tailored specifically to YOU.
When you have an idea about neighborhood, I will film a neighborhood tour – this gives you a good sense of what the neighborhood looks like, what the streets look like, what businesses are there, is it very residential or mixed with industrial? Do you want to be able to walk or bike ride? What about public transportation and schools? Any funky smells? I can show these to you and you’ll have a private link on YouTube to look from afar.
When you find the neighborhood that you like and narrow down the homes, we can take this a step further. Agents always present their listings to the best advantage in pictures, but does this always match reality? No. So again – a video tour of the home, inside and out so that ALL aspects of the home and its situation are available for your evaluation – closets, basements, the street, the back yard. This can be on a video link or through Facetime so you can be “present” on the tour.
If the home is acceptable and you decide to move forward video can continue to do its job. The inspector may take video or your agent can attend in your place and video the inspection. This is helpful because you can pause at any time and rewatch as you like – it gives you some time to process what you’re seeing and hearing in the video. Sometimes inspections can feel overwhelming if it’s a first time buyer, but this actually gives you a way to slow it down.
We already do so much of our business on line – we sign contracts and loan docs, transfer money, search for homes, communicate often and easily via text or msg, this is just the last piece. You can likely close remotely assuming that signatures are notarized or witnessed, and you’ll be able to get keys either sent to you or held for pick up when you’re ready.

It’s always best if you can see the home yourself. Then you KNOW. But if you can’t, that doesn’t have to stop you from getting a home for yourself.

You just need to find an agent that is used to working remotely and is willing to put in the time to show you what you need to know to feel comfortable with your decision. I personally find this to be a really satisfying client to serve – it gives me a new perspective on my city and I get to welcome new residents to a place I love.

Are you in this situation? I’d love to help you out. Contact me or leave a comment with questions!

mschumann@kw.com

612-234-5703

Home equity

Steps to building equity in your home…

April 20, 2020April 20, 2020 MaryLeave a comment

What is equity?

Equity is your ownership stake in the house. If your home is worth $300,000 and it’s paid off, you have have 100% equity in the home or equity of $300,000. Most people do NOT have 100% equity in their home, they may have put a 20% (or if it’s an FHA loan 3.5%) down payment and then owe the balance (80% or 96.5%). But that isn’t the end of the story. Beyond whatever your original down payment is, you can build “equity” in a home by doing what you can to improve the value of the home as well.

Most homes will increase in value over time and that means that beyond paying down principal, equity will increase as the home’s value increases because the value increase is YOURS and nothing to do with any debt to a mortgage company.

To use a very simplistic example: If a home’s value increases at 3% per year and the home was valued at $100,000 when it was purchased, the following year it would be valued at $103,000. You owe less on your loan because you’ve been paying down the principal AND if you were to sell your home would it likely get $3k more than it would the year before, and that money is yours.

Here are some ways to increase the equity in your home:

Pay more than you need to on your mortgage.

This is a great option if you don’t have debts that carry a higher interest rate than your mortgage (pay off the highest interest rate debt first), if your home appreciates faster than your 401K or if you aren’t tight on money month to month.

Talk to your lender to make sure that extra payments will go specifically toward principal and then consider either adding additional money to your payment or trying to make at least one extra payment per year.

Here is an example of interest savings and reduction in the life of the loan by making an extra payment, or simply paying a little more each month from Bankrate.com

Here’s an example of how prepaying saves money and time: Kaylyn takes out a $120,000 mortgage at a 4.5 percent interest rate. The monthly mortgage principal and interest total $608.02. Here’s what happens when Kaylyn makes extra mortgage payments:

PAYMENT METHOD	PAY OFF LOAN IN …	TOTAL INTEREST	TOTAL INTEREST SAVED
Minimum every month	30 years	$98,888	$0
13 payments a year*	25 years, 9 months	$82,870	$16,018
$100 extra every month	22 years, 6 months	$70,944	$27,944
$50 extra every month	25 years, 8 months	$82,452	$16,436
$25 extra every month	27 years, 8 months	$89,864	$9,024
*Extra $608.02 payment

https://www.bankrate.com/mortgage/prepaying-your-mortgage/

Refinance to a shorter term loan.

People often only think in terms of a 30 year loan on a home, but you can finance a home for 15 years at a lower interest rate and pay off your home in half the time. Even better, those aren’t your only 2 choices – you can ask for any term that you like and that will make the rates work for you. Not every lender will have that flexibility, but the ones I work with have been offering off term loans as well.

One thing to consider with this option is that you will have a higher payment that you are obligated to make. You’ll be committed. In the first scenario that I mentioned where you pay a little more every month it’s voluntary and you can set it up to do so automatically so you don’t have to make that decision every month, but you can also stop it if your financial situation changes.

Renovate the interior.

Simple things like fresh paint and new light fixtures can go a long way to improving the value of your home and your equity in it. You don’t have to make it look like an HGTV star lives there – simply having relatively modern fixtures and a home that looks clean and well cared for goes a long way.

If you do choose to do a more extensive update, kitchens and baths are where you’ll see the biggest return. This assumes that you choose a style that is not super trendy or likely to appeal to only a small subset of buyers. Keep things relatively classic and as high quality as you can afford.

Add curb appeal.

Many buyers make their decisions within seconds of seeing a house. You may not be a gardener, but taking care of the exterior of the home goes a long way. No chipped or faded paint. Flowers in pots or well maintained beds. Make your entryway look inviting by having a fresh paint job on the door & quality fixtures. Keep trees and bushes pruned back away from the house and the lawn well cared for and not overgrown. It’s weird that free or inexpensive things like trimming trees and planting flowers can have an impact, but value is also about perception. Square footage is one thing, but condition is another.

Any deferred maintenance on the exterior makes alarm bells ring loudly to buyers and appraisers.

Why does equity even matter?

Well, it doesn’t, unless it does to you. One reason it could matter is if you’ve purchased a home with less than 20% down and want to get out from under PMI. If you are able to increase the value of your home over time or with improvements, you can have the property reappraised and potentially get rid of PMI. If you had an FHA loan you would be required to refinance, but the same theory applies. And, hey! If you had an easy time making your mortgage while paying PMI, pretend you still have it and throw that $100/month at your mortgage principal instead.

Some people want to be debt free, and home mortgages are typically the largest debts we carry. Ridding yourself of a house payment as soon as possible as well as reducing interest payments is a good thing if this is your goal.

Or maybe you use your home as a form of savings account in addition to whatever else you’re doing and plan to sell it when you retire and use the proceeds to buy your beach bungalow or cabin. Or you have kids that will be going to college and you want to be able to use some of the equity in your home to pay for it.

Whatever your goals are, these are a few ways to help you get there.

Home Buying · Home equity

Should you buy a fixer? Here are 4 things to consider FIRST.

April 17, 2020April 17, 2020 MaryLeave a comment

HGTV makes it look really easy and smart to buy a fixer but before you do, think about the following things:

Give the location and the price a really hard look. This is where your agent will come in and help you make a clear-eyed decision based on actual data to see if what looks like a good purchase actually IS a good purchase.

You’ll want to have a clear sense of what other homes in the neighborhood have gone for and what the homes offered. How updated are they? How far would this home have to go? Is it cosmetic changes or do you need to shore up the foundation? And even if the foundation is the problem – is it priced where this would make sense to invest in it?

Look for instant or inexpensive ways to create equity. Is the worst thing about the house the flocked wallpaper and shag carpet? If it’s mostly surfaces that need refinishing, and you’re good with a paint brush and can pull up old carpet, your cost for the return will be really low. A fresh coat of paint goes a really long way. One thing that I have considered in the past is what would make the most impact – floors & walls are enormous parts of the home and resurfacing those pieces can really make a big impact on value. MOST people can’t seem to look past bad decorating. If you can – BONUS!

If there are projects that will require professional help – make sure that they are projects that will bring you good return on the cost of having to hire out. Going back to surfaces – having wood floors refinished is a good return. In Minneapolis we have to have our homes inspected for energy efficiency and paying for insulation will increase the price that the home commands, in addition to paying dividends in reduced energy costs. And there are a lot of incentives provided by the city and energy companies in the form of rebates and low interest loans to help home owners achieve the highest efficiency possible. If you live in Minneapolis you know you want low bills and a snug home.

Lastly – evaluate your ability to live in or with chaos. It can be hard at times if you’re living in a construction site. Even if you’re not and you’re trying to manage the project from outside of it, make sure that you can handle set backs, messes, etc. It always looks so much worse before it gets better.

If you’re curious about a way to do this while having someone else help pay – check out my video on house hacking. 🙂

Comments or questions? I’d love to hear from you. If there is a video that you’d be interested in seeing or a topic that you’re curious about, let me know.

mschumann@kw.com

Home Buying

Rent or buy?!?!

March 2, 2020March 2, 2020 MaryLeave a comment

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.

mschumann@kw.com