Confusion Over Contingent Offers

Confusion Over Contingent Offers

 Buyers and sellers differ on their view of offers that are contingent on the sale of the buyer’s home. Currently in Chisago County there are only 3 listings that are sold contingent on the sale of the buyer’s home. No doubt there have been many more offers submitted that have been rejected by the sellers.

 One buyer that I worked with wanted to find the perfect house before putting her home on the market as she didn’t want to sell her home until she knew she had a place to move. She was not qualified to purchase another property until she sold her home. I explained the risk involved with a contingent offer, as if the sellers accept her offer they will continue to market the property to try to find a non-contingent offer. If the sellers do receive another offer, they can bump her offer and accept the other one.

 Once a contingent offer is accepted, the listing status on the MLS is changed to reflect the contingent offer. This draws the attention to savvy buyers that it is a good property which they can bump, or it can cause confusion to buyers that think the property is sold so they don’t go see it.

 In order for the buyer to remove the contingency for the sale of her home, she would need an accepted purchase agreement on her home, by a pre-approved buyer, that is not contingent on anything other than financing.  This could take at least two weeks to get through an inspection contingency, even if her home sells right away. This allows plenty of time for another buyer to bump her.

 Knowing all of this, the buyer still wanted to submit an offer contingent on the sale of her home. The offer was for full price, as it was the first day on the market. The seller did not accept the offer because they had several other showings on the first day, and they feared if the listing was marked sold on a contingency the showings would slow down.

 My advice was to put her home on the market right away, price it competitively, and hope that the home she wanted to buy would be available when her home sold. After two weeks the buyer’s home sold and she submitted a new offer for $25,000 less than her original offer.

 In hindsight the seller would have been better off accepting the contingent offer as it was for full price and the buyer had a good home, that was priced to sell quickly.

 An experienced agent can provide you with the best advice on contingent offers for your home.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Open Houses Are a Success!

Open Houses Are a Success!

 There are very few open houses in July as many agents as well as buyers are vacationing. Last weekend there were only two open houses listed on the MLS in zip code 55013 and both were mine. I thought I must be the only crazy agent in town until I sold both to visitors of the open house. The previous weekend, I had the same success at another open house.

There are many differing opinions when it comes to the value of an open house to sell your home. Most sellers don’t like them and fear that that nosey neighbors will want to check out their home and they feel an invasion of privacy. The upper bracket home owners have additional fears that non-qualified buyers will come to the open house and they may also have security concerns over valuable art or other collections.

 Some real estate agents love open houses and some refuse to do them as they see them as a waste of time. Some sellers and real estate agents don’t see the value in an open house to sell the home but rather see it as an opportunity for the agent to attract new buyers to work with that are not interested in purchasing the home being held open.

 According to the National Association of Realtors, 87% of today’s buyers their home searching on the internet as they like to educate themselves on the real estate market before they look at homes with a real estate agent. Once they find homes of interest on the internet they drive by homes to check the curb appeal, the neighborhoods, and home values. They love the opportunity to visit open houses to help determine what they want to buy and sometimes they purchase the home being held open.

 The benefits of an open house are: internet exposure as many of the major real estate websites color code the listings that have an upcoming open house bringing added attention to the listing, the listing shows up on open house lists, buyers tend to go farther on their own than they would with their own agent, the listing agent knows more about the property and the neighborhood than the buyer’s agent so we have an opportunity to sell features and benefits that the buyer may not notice with their own agent, we get valuable feedback directly from the buyers, open house signs bring more attention to the listing and neighbors may call someone that may be interested. Even if buyers don’t show up to the open house we see a bump in internet activity on the listing and showings typically increase after the open house.

 Every home requires a unique marketing plan and an experienced real estate agent will provide the best plan for you.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

More Buyers are Testing for Radon

 During the buyer’s inspection period, many buyers are paying for Radon Gas testing in the house. The last inspector we used charged $150 for the test, in addition to $400 for the home inspection. The highest level of radon I have seen was over 5 times the EPA’s (Environmental Protection Agency) recommended action level.

 Radon is the second leading cause of lung cancer after smoking. It is a heavy radioactive gas formed by the disintegration of uranium and radium in the ground. It seeps into your home through holes and cracks in the foundation. The average radon level in Minnesota is 3.8pCi/L which is like smoking 10 cigarettes a day. The EPA estimates 21,000 lung cancer deaths per year attributed to radon. Past and present smokers are at a greater risk than non-smokers.

The seller I was representing had a radon level of 19.5 pCi/L. The buyer requested a radon mitigation system be installed prior to closing at the seller’s expense. Had the seller not agreed, the buyer would have cancelled the purchase agreement.

 The EPA recommends radon mitigation when radon test results are 4.0 pCi/L or greater. The concentration of radon in the home is measured in picocuries per liter of air (pCi/L). Radon levels less than 4.0 pCi/L still pose some risk and in many cases may be reduced. If the radon level in the home is between 2.0 and 4.0 pCi/L, the EPA still recommends that you consider fixing the home. The average indoor radon level is estimated to be about 1.3 pCi/L; roughly 0.4 pCi/L of radon is normally found in the outside air. The higher the home radon level, the greater the health risk. Even homes with very high radon levels can be reduced to below 4.0 pCi/l and many homes can be reduced to 2.0 pCi/lLor less.

 To mitigate radon, most homes need a sub slab depressurization system and sealing of any openings in the basement floor. My client had a fan and a 3” pipe installed to draw air from below the basement floor up through the roof.  This cost my client about $1200 and the contractor guaranteed the radon would stay below 4.0pCi/I, as long as it remained in use.

 In the 550XX zip codes north of I-94, it is estimated that 23% of homes have radon levels above 4.0 pCi/L.

 If you are buying a home, it is a good idea to have it tested for radon, as the seller will most likely pay for the mitigation. If you haven’t had your home tested, it is a good idea to do so, to ensure you are living in a healthy home. An experienced real estate agent can give you advice on how to have your home tested.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Home Equity is Up

Home Equity is Up

Many sellers think they still don’t have equity in their homes and are surprised to find out they can sell their home and walk away from closing with a substantial check. Foreclosures are down, but there are home owners that get behind in their mortgage payments, receive a foreclosure threat, and give up. If you know anyone in this situation, they should talk with an experienced real estate agent as soon as possible. There are more options available earlier in the foreclosure process than later, and it is sad to see a homeowner lose their equity because of a job loss or change in life.

Many septic systems need to be updated to sell, and this has been holding some sellers back. There are options available where the seller doesn’t need to come up with the cash before closing, as some sellers don’t have $10,000-$20,000 to pay out of pocket.

The Chisago Lakes Area has a lot of seniors looking to move off the lakes and into one level living with less maintenance and less stairs, but they are not ready for a nursing home. Many of these homeowners are in their late 80’s and 90’s and their homes may have laundry and mechanicals in the basement, the bedrooms maybe upstairs or the bathroom isn’t near the bedroom. Now that they have the equity to sell and purchase or rent a one level home, they are finding there isn’t enough inventory available for them to move to.

With home prices up, it is a great time to sell your home, but it may sell quickly and you may be hard-pressed to find a place to move. It is a good idea to explore your options before you put your home on the market. Find a community where you would like to live and determine if it is possible to purchase or reserve a home before you sell.

An experienced real estate agent can estimate your selling proceeds and give you options on where to move and how to best accomplish your goals.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Don’t Close Without a Walk-Through

If you are buying a home, your agent should recommend a walk-through of the home you are purchasing prior to the closing. The purpose is to ensure that the home is in the same condition as when you wrote the purchase agreement. It is not time for a new inspection, but to verify inspection requests have been completed, as agreed upon, the personal property is in place as specified in the purchase agreement, and all the seller’s belongings have been removed.

Here are some other items to check at the walk-through: turn on the heating, air-conditioning, appliances, and lights. Open and close the doors and windows. Run all plumbing fixtures, check for hot water and plumbing leaks. Test the garage door opener and sprinkler system. Check the ceilings for any obvious roof leaks, and walk around the property and look for anything that looks out of the ordinary.

Buyers and sellers have varying degrees of what cleanliness means. Often, the seller cleaned, but then the movers came and got the floors and walls dirty again. The seller may not have time to return to clean again before closing.

Moving day can be chaotic. If you are buying and selling a home on the same day, the movers arrive in the morning, pack up while you go to the closing of the house you are selling. Once you have your proceeds you go to the closing for the home you are purchasing. After closing you are given the keys you are running to your new home to let the movers in. By this time, you are concerned about cleaning the house you are moving into and not the one you just sold.

It is a good idea to plan to clean the home you are buying yourself or professionally, even if the seller agreed to do so. This will avoid added stress on moving day.

If repairs were not made as agreed to, personal property is missing, or the property has been damaged, your agent can negotiate an agreement with seller’s agent at closing. If you can’t agree on a settlement, you can refuse to close as the seller may be in breach of contract. Should this happen, you may seek legal advice. Although, I have seen many issues arise at a walk through, I have never had a closing where the buyers and sellers didn’t come to an agreement and close.

An experienced real estate agent, can guide you through the walk through process and negotiate issues that arise.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Open Houses Are a Success!

Open House is Valuable Tool

 There are many differing opinions when it comes to the value of an open house to sell your home. Most sellers don’t like them and fear that that nosey neighbors will want to check out their home and they feel an invasion of privacy. The upper bracket home owners have additional fears that non-qualified buyers will come to the open house and they may also have security concerns over valuable art or other collections.

 Some real estate agents love open houses and some refuse to do them as they see them as a waste of time. Some sellers and real estate agents don’t see the value in an open house to sell the home but rather see it as an opportunity for the agent to attract new buyers to work with that are not interested in purchasing the home being held open.

 According to the National Association of Realtors, 87% of today’s buyers their home searching on the internet as they like to educate themselves on the real estate market before they look at homes with a real estate agent. Once they find homes of interest on the internet they drive by homes to check the curb appeal, the neighborhoods, and home values. They love the opportunity to visit open houses to help determine what they want to buy and sometimes they purchase the home being held open.

 I believe open houses are an important part of a marketing plan for sellers. This past weekend I held 3 of my listings open, and most of the visiting buyers were working with another agent, but the advantage to my sellers was my neighborhood expertise. Many buyers are working with a friend or relative from outside of the area that have no knowledge Chisago lakeshore, acreage, well and septic systems, etc. It is easier for an experienced agent to sell the visitors on the value of the home listed compared to some other properties they may have seen.

 The benefits of an open house are: internet exposure as many of the major real estate websites color code the listings that have an upcoming open house bringing added attention to the listing, the listing shows up on open house lists, buyers tend to go farther on their own than they would with their own agent, the listing agent knows more about the property and the neighborhood than the buyer’s agent so we have an opportunity to sell features and benefits that the buyer may not notice with their own agent, we get valuable feedback directly from the buyers, open house signs bring more attention to the listing and neighbors may call someone that may be interested. Even if buyers don’t show up to the open house we see a bump in internet activity on the listing and showings typically increase after the open house.

 Every home requires a unique marketing plan and an experienced real estate agent will provide the best plan for you.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.