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The Appraiser and the Real Estate Transaction

by Steve Westmark

 

STEVE:  Hi.  Steve Westmark again.  Thanks so much for watching my weekly video blog again.  This week, I’m talking to an appraiser, somebody who’s been doing appraisals for over 30 years.  And he’s Clarke Goset with Goset Appraisals.  Welcome, Clarke.

 CLARKE:  Thank you, Steve.

 STEVE:  Clarke, first I’d like you to talk a little bit about appraising for a seller, maybe appraising their property before putting it on the market.  Do you recommend that type of thing, and how do you go about doing that?

 CLARKE:  Thank you, Steve, I’m glad you asked that question.  Basically, the difference between an appraiser and a real estate agent is the agent’s going to make friends with the clients, and most agents unfortunately carry that to the extent of wanting to tell a client everything the client wants to hear.  Sometimes in the process, particularly in this market, which has been some very difficult times, sellers need to hear the truth. 

 And that’s what we like to think we bring, the element of the realistic market exposure, what’s going to happen with that listing to show the clients that perhaps the house isn’t worth quite what they thought it was or hoped it was.

 STEVE:  Well, besides a good seller’s appraisal, what are some of the other things, Clarke, that you’re hired to do and help people in an appraisal?

 CLARKE:  A lot of things that we do are legal related.  We can do divorce cases.  We can do right away condemnations.  We have been doing a lot of estate work over the recent past.  I’ve been blessed over 30 years to have picked up pretty much the entire spectrum of real estate activity.  We do a lot of commercial work for clients.  Just across the entire scope of appraisal evaluation, anywhere where somebody is concerned about a value or a particular effect to value or roadway or marketplace, whatever it might be going on with a particular property at a particular time.

STEVE:  Well, my final question, Clarke, to deal with is kind of dealing with the analysis, and it runs to be sometimes 20-30 pages for that analysis.  What goes on in that market analysis as you’re trying to do a study on it?

 CLARKE:  It’s remarkable that the more things change and the older we get, the more things stay the same.  It is still location, location, location.  I think today when we take a look at it whether it’s an appraiser looking at it or whether it’s an experienced real estate agent such as yourself taking a look at it, the important thing is to get the location equal. 

 At that point, then what we’re going to do is we’re going to go back a short period of time.  Appraisers like to use six months.  Sometimes we can use a bit longer time.  But we can use a comprehensive analysis in the sense that what we’re doing here is we’re going to look at like to like.  In other words, let’s match the property.  If we’re dealing with a three-bedroom rambler, one-car garage, let’s talk about a three-bedroom rambler, one-car garage.

 Let’s make those properties that we use mate.  The other thing that’s a lot different is that in the old days we used to use just three comparable sold properties, pass it through.  We didn’t need to worry about it because if we got it a little bit high, the value was going to make that next week.  That isn’t the case anymore where we’ve seen a declining property value. 

 What we’re going to want to do in a case like this is we’re going to want to use five, six, seven, sometimes up to nine comparable solds, mating that property with the location, with the size, with the style and all of the rest of the things that we do to make that property sell in this marketplace.

STEVE:  Well, you can tell from just hearing Clarke he has a wealth of knowledge.  And that’s why I look to Clarke to help me in appraisals.  And thanks so much today for coming in and meeting with me, Clarke.

CLARKE:  Thanks for having me, Steve.  I really enjoyed being here.

 

Staging your Home for Profit!

by Steve Westmark

STEVE:  Hi.  Steve Westmark.  Thanks again for joining us on my weekly video blog.  This week, I thought I’d have an interesting conversation with a professional in the area of staging, in getting your house best prepared for selling in today’s marketplace.  And today, we’re meeting with Kathy Holschuh.  Welcome, Kathy.

KATHY:  Thank you.

STEVE:  So Kathy, in today’s marketplace, what do you find is the biggest bang for the buck for clients out there when they’re getting their home ready for sale?

KATHY:  Well, Steve, I think the most important thing that a client can do to get ready to sell their home is the color that they use on their walls.  It’s one of the most important things that can give your home a warm, homey feeling.  And there’s so many times that the client goes online and looks at homes and it makes a big difference what color the walls are when they look at each of the pictures.  Of course, they’re looking for the size and bedrooms, but this also is a really important feature to look for.

And a color can change the whole woodwork.  The color, the warmth of each room.  It makes a difference with their furniture, how it ties everything together.  So I feel that’s probably one of the most important things they can do.

STEVE:  Well, another thing I’ve run into, Kathy, as I’ve looked in the marketplaces and I meet with sellers is I tell them it’s a price war and a beauty contest.  So as you’re helping someone make their house beautiful, what do you do to help them minimize the things that are in their property so it does become a beautiful home?

 KATHY:  I think one of the main things that they can do is get rid of all the clutter.  There are so many times that there’s baskets and paper and extra toys and just day-to-day living.  And if you can get that into a reasonable area, hide it in cupboards, and try to sort is probably the best thing that you can do.  And another thing is try to get rid of a lot of little things, but keep a lot of your bowls and accessories that are going to really add to the look and feel of your home.

 STEVE:  So as you’re getting your house ready, what is some of the best bang for your buck that you can do as a seller that will give you the highest return on your investment?

 KATHY:  The biggest thing I think for anyone walking into anyone’s home is that you notice when you walk in the door how clean a person’s home is.  And I think that reflects on how well they’ve taken care of their home over the years.  And it makes a huge difference that even the threshold, the front entry is spotless, the windows are clean.  If there’s spots on the wall, if you can clean those off.  Anything that is really apparent in your home that the buyer feels like everything is just really nice and clean and well taken care of.

 STEVE:  Well, lastly, Kathy, I think people kind of wonder what goes on within the services.  And you’ve done the gamut from where I’ve had a real upper bracket home and we spent a lot of money to help sell it and get top dollar.  But what are some of the levels of service like from starting from some simple thing to where we went to with that very upper-bracket property?

 KATHY:  Well, Steve, it could be anything as simple as a simple walk through a home with a minimum charge of $200 to give the homeowner ideas and help them decide which are the best things to stay in the room or leave.  And it can go on to the next level where you’re painting and adding new carpet, which can be $5,000 to $10,000 and then the next level, which we can provide furniture for the rooms and adding granite countertops, changing some bathrooms, and that can go from $10,000 to $20,000 and on up.  So there’s all kinds of different choices that you can make to change your home and getting it ready for it to sell.

STEVE:  Well, it’s been great to have Kathy here today, and we try to give you a short synopsis of how you can get your home staged.  And Kathy, if you were going to want to work with somebody, how could they get a hold of you and call you to have them come over to their property?

KATHY:  My number is 612-990-8855, and I always have my phone with me, so you can call at any time.  Thank you.

Mortgages That Work For The Consumer!

by Steve Westmark

STEVE:  Hi.  This is Steve Westmark.  Thanks again for watching my weekly video blog.  This week, I thought I’d bring an expert in in the area of mortgages, and her name is Jill Meents of Bell Mortgage.  So welcome, Jill.

JILL:  Thanks, Steve.

STEVE:  You know, one of the bigger things that I’ve run into in the marketplace in the last five years is all the mortgage fraud that went on.  And so the mortgage industry has really changed.  Jill, what is it that’s gone on in the mortgage marketplace that’s changed significantly that you have to help people understand?  Like for instance what’s going on with FHA or Fannie Mae or jumbo loans.  What do you find has changed in the marketplace from where it was three to five years ago?

JILL:  You know, Steve, what’s interesting about mortgage fraud, it has really changed our mortgage world.  It used to be that we would get a few pieces of documentation, run a credit report, do an appraisal, and we were done.  Unfortunately, because of the mortgage fraud, we’re now looking for two years of tax returns.  We’re looking for bank statements, paycheck stubs.  We’ve really gone above and beyond what we need for paper today.

Now as long as someone has all that paper, that’s great.  But it is a real frustrating world for buyers right now having to come up with that much documentation, even on good buyers.

STEVE:  I think another question that some buyers may have today is what does it take to be able to get into a house.  I mean, we used to have zero down financing.  I know that it takes some amount of money.  What amount of money does it take to get into a house today?

JILL:  You know, Steve, it really hasn’t changed the criteria for actually applying for a mortgage today.  If you’re a veteran or if you’ve been in the Armed Services or in the Reservists, you can still come in with zero percent down.  If you do FHA, which most of our first-time homebuyers do, that’s 3.5% down.  And part of that or all of that can actually be a gift from a relative.  We can actually structure a transaction to have the seller pay the closing costs.  And then of course for our second-, third-, and fourth-time homebuyers there’s conventional financing, which generally, we’re wanting 5% down.

STEVE:  You know, I put in a recent newsletter that I don’t think my parents ever saw a mortgage at 4%.  And I used to sell houses in the early 80s where rates were at 17% and 18%.  What is going on with the interest rates in the marketplace today and what do you look for in trends in the future coming months?

JILL:  Steve, you’re right.  Interest rates are at an all-time low.  We’ve been writing some mortgages in the high 3%.  But it’s interesting.  Now with the new QE2 Program coming out, which is the new stimulus package, money is going out of the bond market into the stock market.  You’ve seen your stock market start to improve.  We’re also a little bit concerned about inflation and what’s going to happen with the value of the dollar.

All of that starts to drive interest rates back up.  So sure enough, we’re about a half percent higher today than we were at the all-time low, and we think we’ve probably seen the low, that rates will slowly start climbing back up.  But they’re still phenomenal.  When I came into the business, they were 21% and we’re still writing loans today at 4 and an eighth or 4 and a quarter.  So they’re wonderful.

STEVE:  Well, I know another big question people have is in the area of refinancing because sometimes a person can refinance and get a lower rate.  What are the things that you look for in helping a person in determining refinancing today and what are the things that are the concerns that you have to help somebody through in determining whether they can refinance their house or not?

JILL:  Well, refinancing has certainly been a huge part of our business this year, and one of the first questions I ask someone when they call up and they want to refinance is “What is the goal?” or “What are we trying to accomplish here?”  Are we trying to drop the rate?  Are we trying to shorten up the term?  Are we paying off debt?  Are we paying off a home equity credit line?  What are we trying to accomplish?  But I think the biggest challenge that we’re having, of course, is values dropping.  Where somebody thought they may have had quite a bit of equity in their property, today that equity has actually eroded.

 But the good news is the administration has come up with a couple of good programs that even if your equity has eroded, we can still look at refinancing if you qualify for certain criteria.  So we’re writing a lot of refinances that are much more challenging.  People are very disappointed in their values, but we’re getting them done and saving people a good deal of money.

STEVE:  Well, as you can tell, I have to be a professional in the real estate area just like Jill has to be a professional in the mortgage area.  So Jill, if somebody has questions in the near future on whether it be purchasing a home or refinancing, what is the best way to get a hold of you and how can you help them?

JILL:  Thanks, Steve for inviting me on the program.  The best way to reach myself at Bell Mortgage is 952-278-8731, and we’d be happy to run numbers for you whether it’s a purchase or refinance or just looking at restructuring debt for you.

STEVE:  Hey, thanks for joining us today and we look forward to you watching us next week.  And thanks again, Jill for coming in and sharing your great wisdom.

 

Home Inspections Done the Right Way!

by Steve Westmark

STEVE:  Hi.  This is Steve Westmark.  Thanks once again for watching my weekly video blog.  This week, I’m going to have an expert in here talking on home inspections.  My expert is Jeff Blixt of Inspecta-Homes, and Jeff has had his company for many years.  So welcome, Jeff.

JEFF:  Thank you, Steve.  Thanks for having me here today.

STEVE:  What are the requirements of being a home inspector today?

JEFF:  Okay, Steve, great question.  You know, one of the things that we get asked a lot when people call in to order inspections is they ask what are our qualifications because people assume that in the state we’re either certified; we’re licensed; we’re bonded; and none of that is true.  In the state of Minnesota, there are absolutely no requirements to be a private home inspector.  Anybody that wants to print up a card and call themselves a home inspector is free to do that.  And I think that’s kind of scary from a consumer aspect.

And so we tell people look for how long they’ve been in business, how many inspections have they done, do they do this full time, what affiliations do they belong to.  We have three major affiliations in our market: The American Society of Home Inspectors, The National Association of Home Inspectors, which both require testing, proof of knowledge through experience before they will award certification or membership.

And then we have another local group called The Minnesota Society of Housing Inspectors that deals more with the truth in housing ordinances and time of sale ordinances.  But again, something that consumers should understand is anybody can print up a card, call themselves a home inspector, so you really need to do your due diligence just like you would in hiring any other type of contractor.

STEVE:  Well, my last question for you today, Jeff, is for probably everybody out there who owns a house.  What are things you can do, this being fall going into winter, that you could prepare your house for to protect it going into the new season that we’re going into?

JEFF:  Steve, there’s a lot of things, but I think foremost what a lot of people forget to do is to change their furnace filter.  And we really harp on that.  You know, we rely on that in the state of Minnesota.  With the type of weather we have, we’ve got to have a furnace that we can depend on.  And part of depending on that is maintaining it and taking care of it.  Beyond changing the furnace filter, what a lot of people forget to do is with the air to air exchangers that the newer homes have, those need to be cleaned on a regular basis also. 

And I would say at a minimum twice a year, spring and fall, clean the filters out and make sure that they’re set properly.  Beyond that, shutting off faucets.  This time of year, and we’re going to find some frozen faucets in the next week or two, disconnect those outside hoses, shut them off on the inside or you’re going to have problems with it at some point in time during the winter when it starts to thaw out.

STEVE:  Well, Jeff, thanks so much for coming in today.  Your dad has been a friend of mine for years and he was the guy that started the company years ago, and in fact, is the first inspector company in town.  So Jeff, how do we get a hold of you and your group of inspectors to do the job to help people in buying and selling of houses?

JEFF:  Well, Steve, I thank you again for having me over today.  I do appreciate the opportunity to come and talk with you.  And in regards to my father, I always refer to him at the guru of home inspectors because he really was at the forefront of this industry in this part of the country or actually nationally.  And to get a hold of us to schedule an inspection, we’d love to earn your business, you can call us at 651-641-0641, and we have a full-time office staff that’s there Monday through Friday.  They’ll be more than happy to help you out with any questions you have or certainly scheduling an inspection.  Thank you.

 

 

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Photo of The Steve Westmark Team Real Estate
The Steve Westmark Team
RE/MAX Advantage Plus
14451 Highway 7 Suite 100
Minnetonka MN 55345
612-978-7777
877-SOLDING
Fax: 952-241-1600