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.

Real Estate Sales Change with the Season

Real Estate Sales Change with the Season

 New listings were up 16.6% for Chisago County in May 2016 over May 2015, according to the Minneapolis Area Association of Realtors, however, closed sales were down 6.4%. This is most likely attributed to our warm winter weather, which brought the buyers out early for 2016. Closed sales in April were up 17.4% over April 2015. Closed sales are based on purchase agreements that were written approximately 45-60 days before closing.

 The inventory of homes for sale in Chisago County was at its highest point for 2016 in May. A lot of buyers weren’t ready to put their homes on the market until May as it took time to get updates complete, the landscaping looking good, and they prefer to move over the summer. Many sellers also saw an opportunity to take advantage of the media’s hype of the “seller’s market” with homes selling in multiple offers over list price due to low inventory. The problem with listening to the media hype is that they are reporting on historical data (closed sales) and not the current market activity.

 We started 2016 with low inventory, which was down 18.2% in January, 11.3% in February, and 11% in March compared to the inventory in 2015. It stabilized in April in and increased in May. The low inventory months are typically best for the sellers.

 With more inventory comes lower prices, which moves us into a buyer’s market instead of a seller’s market. The median sales price dropped from $230,000 in April 2016 to $210,000 in May 2016. This means there were more options for buyers, more negotiating, and lower prices for sellers.  

 This is not all bad news as the inventory for May 2016 was still below the inventory for May 2015 by 19.6% and our median sale price year to date was up 10.7% over 2015 from $189,700 to $210,000. The average list vs. sale price was at 96.3% through May 2016.

 Now that we are in our prime vacation season for the area, we should see an increase in waterfront home sales and acreage as more buyers visit the Chisago Lakes Area and fall in love with our wonderful community!

 An experienced real estate agent can provide you the current market data to help you determine if now is a good time to sell or buy your next 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.

Pitfalls of Buying Foreclosure Properties

Pitfalls of Buying Foreclosure Properties

   There was a time after the market crash in 2008 that up to 70% of our buyers were purchasing foreclosure properties and realizing handsome profits within a few short years. Today many buyers think buying a foreclosure property means getting a good deal, but unfortunately that is no longer guaranteed as foreclosure prices are now typically within 10% of market value.

 Many real estate agents are resistant to working foreclosure listings because it can mean delayed responses from the banks, long closing times, additional paperwork, multiple offers, and frustrated buyers.

 Foreclosure properties consist of short sales and bank owned properties. With a short sale the home owner is in default but the bank doesn’t own the property yet as the home owner is still in title. There is no guarantee that an offer on a short sale will be approved by the bank and often times the bank will counter the price above the seller’s asking price.

  Foreclosures listings are not as common as they were after the market crash. Bank owned listings made up less than 4% of the new listings in April 2016 and short sales listings made up less than 1%. In April 2009 new foreclosure listings made up 31% of the new listings. This is good news for traditional sellers as their home prices rise and their marketing time decreases with less foreclosure listings available.

 Last weekend I showed 2 bank owned properties and both were priced below market value, which was enticing to my clients, but the condition of the properties was less than desirable, and not worth making an offer on. It is not uncommon for homeowners stop making repairs on their home when they can no longer make the mortgage payment. In most cases banks will sell the properties “as is”, but in some cases they renovate them, if they believe they can profit from the improvements.

 Another client of mine was adamant about purchasing a bank owned property, which we successfully accomplished after submitting 3 different offers and competing in multiple offers. The bank would not accept an offer below list price, or contingent on the successful closing of their home, and they wanted a guaranteed closing in 30 days or less. The buyers were allowed to do an inspection to make sure they wanted to purchase it, but they had to buy it “as is”.

 An experienced real estate agent can help you determine if purchasing a foreclosure property is in your best interest.

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

Should You Make an Offer Contingent on the Sale of Your Home?

Should You Make an Offer Contingent on the Sale of Your Home?

 Many buyers want to purchase a new home, but they have an existing home to sell first. They are apprehensive about selling their home until they know they have a place to move to. They often want to make their new purchase contingent on the sale of their existing home. This is not a good idea when we are in a seller’s market, like we are now when the housing inventory is so low.

 Many sellers are receiving multiple offers and if one of the offers is contingent on the sale of the buyer’s home, it will quickly be thrown out as the seller has no assurance of when or if there will be an actual closing.

 If a seller does accept an offer contingent on the sale of the buyer’s home, the listing status is changed from “Active” to “Active Contingent on the Sale of Another Property”. This means that the seller still has the right to continue to market the property to attract other buyers. There is an immediate notification to other buyers out there that someone wants this house but can’t buy it without selling their home. If another offer comes in for the property, the new buyer can bump the contingent buyer. The contingent buyer will be given notice that the seller wants to remove the contingency, within 2 business days, or whatever time period was previously negotiated. The buyer must provide a true and valid purchase agreement on the buyer’s existing home, with no contingencies other than financing, to remove the contingency and move forward with the purchase.

 From a seller’s perspective, if the contingent offer is the only offer on the table, then they would most likely accept the offer as it can generate interest from other buyers, and it can keep the contingent buyer motivated to get their home sold quickly to remove the contingency before they get bumped.

 I advise my clients that know they want to move, to get their home sold before they write an offer on another property so they are in a position to purchase without the contingency. As soon as there is an accepted offer accepted on their existing home, we start looking for their new home and try to time the closings for their sale and purchase on the same day. Their offer may be contingent on the successful closing for their existing home, as they need the proceeds for their down payment, but it is no longer contingent on the sale of their home.

 An experienced Real Estate Agent can help guide you with the best negotiation advice for your unique situation.

 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.

Multiple Offers Are Back!

Multiple Offers Are Back!

 The real estate market is moving at a rapid pace and once again, multiple offers are a common occurrence on new listings. Sellers love them and buyers hate them. Last weekend I showed a couple a house that had been on the market less than 24 hours, and we found 4 other agents and their buyers looking at the house at the same time. My first time home buyers were overwhelmed at the idea of competing against other buyers for this house and did not make an offer. There were 6 offers on the house by the end of the day. The house was listed for $189,900 and the offer accepted was $20,000 over the asking price.

  That was a good day for the seller, but the property still has to appraise for the purchase price or they could end up the lowering the price for the buyer to get financing. The offer was also contingent on an inspection and sometimes a buyer will try to renegotiate the price, request repairs, or cancel the purchase agreement due to fear that they offered to much for the house. It is unusual for a buyer to pay 10% over list price, even in multiple offers. My guess is that this buyer was tired of losing out on other offers and loved the neighborhood.

 The state approved listing agreement asks the seller to decide if multiple offers shall be disclosed to the buyers or not. Most people think you should disclose multiple offers to create a bidding war and drive the price up, but it doesn’t always work that way. There are many buyers that don’t want to be in a bidding war and there have been cases where disclosing multiple offers has chased all of the buyers away and the seller had no offers on the home.

 An experienced real estate agent can explain the pros and cons of disclosing multiple offers should they arise when you are selling your home. Whether you are a seller or buyer, a real estate agent should provide you with a detailed market analysis, to make sure you comfortable with the value of the home you are selling or buying.

 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.

Welcome to Kempenich Team Blog and News

Welcome to Kempenich Team Blog and News

Welcome to KempenichTeam.com Blog and News page.  This blog contains a variety of articles, news and information that will help you sell or buy your next property. The Kempenich Team can work with you to sell or buy your home. They are seasoned experienced real estate agents for Coldwell Banker Burnet. For immediate assistance Call or Text Cheryl at 612-735-0553.