West Metro Minnesota Real Estate Blog

Jan. 15, 2019

Homebuyer Basics: Closing on a New Home

Tips and tricks to arrive at your closing with confidence…and leave with a set of keys.

 

Closing Date SetCongratulations, you’ve navigated a home search, written an offer and are ready to close on your new home. While your work is nearly done, getting the details of the closing right is an important final step in the process.

Like so many steps along the way, an efficient and hassle-free closing is all about risk management. How you prep, what you bring and a few double-checks can save you delays and heartache. Here are a few tips for a successful close:

Tip 1- Schedule Carefully

Trying to close on a home over a lunch hour is not recommended. Instead, we recommend finding a half day that you can clear. It likely won’t take all afternoon, but hiccups in the process do occur and many are out of your control. Pad your time accordingly. You won’t want to rush a process that involves so many important details.

Tip 2- Focus on Your Prework

The majority of issues that delay closing could have been addressed if buyers took the time to do their homework.

A few action items prior to closing:

  • Review your loan estimate and sign your closing disclosure.
    These documents outline the terms of your purchase and must be in place three days before you close-- but you shouldn’t wait that long. Get them early, verify that all of the details are accurate and fit with your expectations. If you aren’t sure, ask! This is a huge deal for you, but a day at the office for your mortgage pro and they have no doubt had every question imaginable.

  • Finalize specifics related to your cashier’s check or wire transfer.
    Your lender will be all over this, but mistakes do happen. Verifying and double-checking the spelling of your name, account numbers and other key details can save you an 11th hour surprise.

  • Complete a final walk-through.
    Most contracts allow you to inspect the property 24-hours prior to closing. This is when you should ensure all repairs have been completed to your satisfaction and the home is ready for the transfer in ownership. If they aren’t or you find issues, this may delay your close, but it doesn’t have to. You may still able to negotiate compensation and continue on schedule.

Your New Home

Tip- 3 Bring Everything You Need

Buying a home is likely to be the single most significant financial transaction you enter. As such it is incredibly formal and regulated. Regulators require much of home purchasers and you should be prepared to jump through all of the hoops.

This means bringing:

  • All parties to the transaction
    While there are options for buyers who may be out of pocket, securing a power of attorney document or other workarounds can add layers of complexity. It is much simpler to schedule closing at a time when everyone is available.

  • Identification
    Your closer can help you understand what is acceptable, but you should make sure that you will be able to bring a driver’s license or other key documents for everyone involved in the transaction. Remember name changes due to marriage or nicknames can have an impact here.

  • Your deposit
    You’ll need to bring along your cashier’s check or details about the wire transfer that will fund the down payment on your new castle. Again, take a moment to check the details. Wire fraud does occur and an extra perusal of all key documents can help prevent it.

  • Your checkbook
    In the era of online bill pay, you may not routinely carry a checkbook.  However for your closing you should find yours, dust it off and bring it. Unexpected expenses and “missed items” can and do crop up. Most can be addressed in the room, but only if you are prepared.

The Bottom Line

Closing represents the end of a long journey.  While finishing strong requires some diligence, your real estate professional, mortgage lender and closer are all adept at navigating this sometimes confusing world. By finding the right partners you can help ensure you are successful.

At Zachary Adams and Associates we realize our buyers may be on a learning curve and that closing on a new home can be intimidating.  Rest assured that we can help demystify the process, lay out the steps and work with your mortgage lender and closing company to deliver a hassle-free close.

 

 

Dec. 18, 2018

Sold in 2018: The Most Expensive Homes in Minnesota

It’s the most wonderful time of the year. Bet it would be even better if you were lakeside on Minnetonka.  It’s time for our annual look at how the other half live via the top real estate transactions of the year for Minnesota.

Takeaways:

  • The West Metro is the place to be in Twin Cities residential real estate

  • 2018 saw five lakeside homes eclipse the $5 million mark

  • With the “sold search” function on westmetrohomesearch.com you can explore every sold home, as well understand the market for homes in your budget

 

This year's top five features a landmark mansion at #1 and also includes a bonus house that a notorious local businessman used to call home but now houses our state’s most famous hard-court athlete. Without further ado, your top five (+1)

Top Millionaire Minnetonka Mansions sold in 2018

#5- 2600 Spirit Knob Road, Woodland

$5 Million
6,300+ sq. ft, 2.03 acres
5 bedrooms 6 baths
Sold 07/26/18

Got $5 million and a love for turrets? Combine both with 360 feet of west facing shoreline on 'Tonka and this may be the place for you. The listing describes the home as a “Frank Forster-designed French Normandy home” sitting on a “sprawling estate”. It looks a lot like a castle.  One that comes complete with a sunroom, greenhouse, fountain and two giant bronze lions to guard your driveway.

 

#4- 3580 Northome Road, Deephaven

$6.55 Million 
9,800+ sq. ft, 3.5 acres
5 bedrooms 11 baths
Sold 10/22/18

If you happen to find an extra $1.5 million in your couch cushions, you may want to upgrade from the run of the mill $5 million estates and consider this gem. Outbuildings galore include a pool house and boat house to accommodate even the largest posse. A wooded lot with gardens and trails provide even more ambience, enhanced (naturally) by the proper seasonal selection from your wine cellar.

 

#3- 655 Bushaway Road, Wayzata

$6.85 Million 
10,800+ sq. ft, 1.24 acres
7 bedrooms 9 baths
Sold 11/01/18

West-facing shoreline is the name of the game in the best of the best and this home makes our list 3 for 3 on that front with 267 feet of it. This gem features a more modern remodel with stunning white throughout. It is the perfect spot for entertaining, complete with a theater and multiple dining areas.

 

#2- 555 Bushaway Road, Wayzata

$10.03 Million 
6,000+ sq. ft, 6.9 acres
7 bedrooms 9 baths
Sold 6/22/18

Looking for a less updated home with a sprawling lot of nearly seven acres? Or perhaps you are an aspiring land developer looking to subdivide into three lots? Either way the “other” property on Bushaway Road may be the spot for you.

 

There really is nothing like spending $10 million on a teardown.

 

#1- 1400 Bracketts Point Road, Orono

$11.327 Million 
25,000+ sq. ft, 5.42 acres
7 bedrooms 13 baths (!)
Sold 8/27/18

Number one on our list is the historic Pillsbury Mansion and the rare opportunity to own a piece of history. This home is classic and stunning, including a hot tub surrounded by hand-painted murals and other amenities you have to see to believe. The listing says that Mrs. Pillsbury is quoted as saying , "A house can be elegant without being ostentatious”-- you be the judge if she hit the mark.

 

 

BONUS HOME- 1492 Hunter Drive, Wayzata

Around $4.97 Million (private transaction)
17,251 sq. ft, 5.23 acres
5 bedrooms 9 baths


And last but not least, we present the former home of a local disgraced auto magnate and new home to your favorite 7 foot hoops player. Turns out 20 points and 11 boards a night can wear a guy down. Luckily he’s got 11 garage stalls, a golf hole, indoor sport court and tea house to help him unwind.

Only nine bathrooms though? The Pillsbury’s had 13. Oh well, you can’t have everything… but with a max contract you can afford most of them.

 

Interested in joining the club?

Do these listings have you dreaming of a new home?  We'd love to be a resource to help. It doesn’t take multi-millions to improve your quality of life in a new home for 2019-- it only takes action.

A free consultation is a great way to get started by defining a budget and exploring your options. Contact Zach today at 612.656.9647.

 

 

Dec. 18, 2018

Homebuyer Basics: Buyer's Inspection

The buyer’s inspection is an essential step in protecting your interests when buying a new home. Understanding what to expect can help ensure you get it right.

 

Home SearchA home inspection is integral to managing risk when buying a home and should therefore be a written as a contingency in virtually every offer. It offers the buyer a chance to bring a licensed expert in to review a home in detail following acceptance of a contingent purchase agreement.

The home inspection will help document a home’s features, issues and general condition, breaking down items in need of immediate attention as well as maintenance items to be addressed later.

Your inspector should be licensed and can be found via referral or by using the Find a Home Inspector feature on the American Society of Home Inspectors website. Your home inspector will provide a sample report for you to review prior to engagement. Fees for an inspection typically range from $200 to $400+ based on the size of the home.  The inspection itself generally takes two to three hours to complete.

Five best practices can help you make the most of your inspection:

1. Be Present

Walking through your potential new home with a licensed inspector is crucial to understanding not only red flags, but maintenance you may have to address in the future.

Being fully engaged and asking questions can also help you discern which items are major and important versus those that are trivial and to be expected. You’ll receive a written report either way, but participating in the process can help allay any fears and ensure you understand your potential new home

Fall Home Search

2. Be Prepared for a Long List of Findings

Home inspectors are detailed people who are hired to find issues, therefore issues they will find. This detailed analysis can help you ferret out concerns and avoid surprises, but it can also be overwhelming for the uninitiated. Every home has nuances and items that an inspector will note (especially older homes).  Do not be discouraged if the list grows long. Many will be small maintenance issues, or simply raise questions to ask of the sellers. The important part of the process is categorizing issues as outlined in best practice #3.

3. Identify Major -vs- Superficial Issues

Your inspector can help you determine which items rise to the level of major, but the list includes items you might expect. Poor wiring, foundation issues, environmental concerns, mold and others represent significant concerns that should understood fully. Your seller’s disclosure should help you understand existing issues, but If something significant and unforeseen arises, you should consider carefully whether you may wish to void your purchase agreement.

4. Review Inspection Report with your Agent

An experienced real estate agent will have a depth of knowledge about the home inspection process and can help you digest the inspector’s findings. Be sure to engage yours following the inspection to review the list of items and help categorize them as trivial, actionable or deal breaking. Lean on their breadth of experience as an objective third party to help you determine the best course of action.

5. Take Action Post Inspection

Following an inspection and review with your agent, you likely have three options:

  • Define repairs you’d like to see addressed- your agent can help you document these and thus begin a negotiation with the seller to determine which repairs to pursue and whether those are to be completed by the seller, or if funds to cover the repairs may be credited to the sale price

  • Accept the condition of the home- under this option you accept that nothing major cropped up and can remove your offer’s contingency

  • Walk away from the deal- if major undisclosed issues are uncovered, you may choose to rescind your offer, retaining your earnest money

By far the most common scenario listed is the first one. While inspection reports can be lengthy, they typically uncover a handful of items that need to be addressed to bring a property up to code or otherwise raise it to the level of acceptable for sale. Your agent can help you determine which items rise to this level and help walk you through resolving them.

 

The Bottom Line

The buyer’s inspection is one of the final steps in the purchasing process, but it is also a crucial one to protect your best interests. The key component throughout this process is the aid of an experienced real estate professional. An effective buyer’s agent is not a sales person trying to sell you a home, they are a partner for your buying journey, applying expertise and offering guidance along the way. This is true throughout the process, but pays particular dividends during the inspection phase.

That is why engaging the right agent is so important.  Zach Adams take his responsibility as your advocate seriously and has hundreds of satisfied clients across decades of transactions in the west metro of Minneapolis. He can carefully and fully explain the inspection process or any of the other many components to buying and selling homes.

Buying a home can be challenging, but in partnership with Zach it need not be overwhelming. Contact Zach today at 612.845.789 to learn how he can help you at every step along the way.

 

Nov. 29, 2018

West Metro Market Update

According to the National Association of Realtors, 77% of people nationally believe now is a good time to sell a home.  But how do things look here in the west metro?

National trends in residential real estate include a continued tight inventory of homes along with some price stabilization in home values.  But is that true in the west metro?

Three local trends tell the tale.

Trend 1: Continued Price Strength

Since early 2014, residential real estate prices have been on a steady trajectory upward. Home values and sale prices have gone up significantly. These upticks have been seen across the country but especially in the west metro.

This fall however, the national media has included more than a few stories indicating that price increases may have begun to level out. While there is some dispute as to what is happening nationally, this has certainly not been the case in the west metro. Here price strength has not only held but added to recent gains with solid percentage growth versus last year in median sales price.

 

Median Sales Prices
Oct ’17 vs Oct ‘18

 

Eden Prairie

+3.4%

Maple Grove

+14.2%

Minnetonka

+18.1%

Plymouth

+15.2%

 

The message here is that homes hold their value better in the west metro and despite national headlines, local metrics indicate growth.  These are partially bolstered by new construction, but generally indicate strength across the board. Location matters when looking at trend lines and the west metro has proven time and time again to be one of the more stable real estate investments.

Trend 2: Overall Inventory Lower Versus 2017

Another notable trend nationally has been low inventory in residential real estate with supply trailing demand. This has created a market that is more apt to favor sellers. Here at home this trend has proven to be at least partly true. When compared with 2017 numbers, the total supply of homes in 2018 is down, continuing the longer term trend.

 

Inventory of Homes for Sale
Oct ’17 vs Oct ‘18

 

Eden Prairie

-5%

Maple Grove

-14%

Minnetonka

-12.3%

Plymouth

-9.5% 

 

This is not to say that there are not homes available at all price points, only that total inventory is lower versus  last year. It is not all doom and gloom for weary buyers however.  Those seeking optimistic numbers need look no further than trend #3.

Trend 3: New Listings Up in some West Metro Communities

Despite overall inventory falling, new listings are up double-digit percentages in Minnetonka and Plymouth. This seems to support a longer term easing of the persistent inventory pressures we’ve seen during the recent rise in values. 

 

New Listings by City
Oct ’17 vs Oct ‘18

 

Eden Prairie

0%

Maple Grove

-9.3%

Minnetonka

+10.2%

Plymouth

+12.5%

 

These numbers seem to indicate that fall and winter buyers may be well-positioned in the communities seeing this increased inventory. By choosing to purchase a new home outside of the spring rush these buyers may capitalize early on trends and benefit from some additional inherent advantages to avoiding the hyper-competitive real estate period.

The Bottom Line

While rising rates are something to keep an eye on, the markers of a true real estate bubble do not appear to be forming.  A roaring economy shows no signs of slowing and inventory continues to be moderate.  This tends to point to the fact that a rise in rates can likely be absorbed by the market in the near term with minimal impact to the underlying fundamentals.

Overall the west metro remains the preeminent location for Twin City homebuyers. Home values, inventory and other factors point to an active market in a location where livability continues to rank incredibly high.

Regardless of trends, finding a new home continues to be a highly personal process. Trends still matter, but defining your goals and partnering to meet them matters much more.   No matter where you are in the process, Zach Adams and his team are ready to work hard to identify next steps and serve as subject matter experts to help you along the way. 

A no cost consultation is a great first step.  Contact Zach today at 612.656.9647 to get started.

Posted in Market Update
Nov. 5, 2018

Homebuyer Basics: Writing an Offer

Writing a competitive offer is integral to landing the home of your dreams under the terms you desire. Understanding the various components of this process can help you collaborate with your agent to get it right.

 

Home SearchYou successfully defined your budget, engaged a mortgage lender and crafted a strong search. After all of that work you have finally identified the right home. You are confident you are ready for the next step-- to write your first offer.

While it can seem like you may be nearing the finish line, in many aspects the real race has only begun. And while an experienced real estate agent will prove invaluable in helping you break the tape, you need to work in collaboration to tackle a few key action items along the way:

Define the Purchase Price

While this may seem pretty straightforward based on list price, this step can be anything but. Obtaining value means juggling a variety of variables:

  • How long the property has been listed
  • Current market environment and inventory of similar homes
  • Motivation of the seller
  • Existence of competing offers

This is one spot where an experienced local agent can shine particularly brightly. The wisdom of their experience can help you balance all of these components and dial in a price that is attractive enough to either close the deal or at a minimum elicit a counter.

Fall Home Search

Determine Contingencies

Contingencies lay out specific criteria that must be satisfied in order to execute a sales contract. While nearly every purchase agreement will contain a buyer’s inspection and financing contingency, there is great flexibility in which other factors should be written into your offer. For instance, many purchase agreements are contingent on the buyer selling their current home.

Contingencies are important to protect the buyer, but they can also be seen as burdensome by the home seller. Again, we are looking for balance to ensure you have the protections you need but in terms the seller can also accommodate. A good overview of common contingencies to consider is available here.

Consider Concessions

Depending on the market conditions, you may wish to include concessions in your offer. These could include asking the seller to help finance your closing costs. This may be appealing as a way to build flexibility if you have limited cash in hand and need to invest the majority in your down payment.

Additional concessions may include property specific items that you’d like included in the sale like appliances and furniture. All concessions (along with other components of your offer) are negotiable within the counter-offer process.

Make a Deposit of Earnest Money and Share Your Financing Details

Earnest money is a good faith investment that shows you are serious about purchasing a home. It is submitted with your offer, paid by the buyer and typically 1%-2% of the purchase price (but can be more). If the purchase agreement is accepted and the offer terminates due to issues not covered in contingencies, earnest money is generally forfeited to the seller. This gives the buyer some ‘skin in the game’ as a protection for a seller who faces the risk of accepting a purchase agreement only to have it fall through later after significant investment of time.

In addition to earnest money, sellers are further protected by asking buyers to disclose funding details in their offer. These detail show how you’ll pay for the down payment and how your mortgage loan will be structured. Your mortgage professional and real estate agent can collaborate to help you complete this section of your offer as well as help you understand an appropriate amount of earnest money to include.

Select Your Closing Date

A closing date can seem like a benign detail, but can be important depending on the circumstances for either the buyer or seller. Generally a 30-day closing period is standard, but your offer can stand out if you have flexibility in timing. Generally your agent can understand your situation and speak with the selling agent to help you come up with the best closing date for your transaction

Include an Expiration in Your Offer

A sometimes overlooked detail in this process is the expiration of your offer. A clear expiration date spelled out in the purchase agreement can offer a deadline to ensure your offer receives a prompt response.

 

The Bottom Line

While this may seem like an extensive list, it is truly represents the bare minimum of factors to consider when writing an offer. While the process can seem intimidating, the process need not be, though it is important to get the details right. This is a legal contract for what is likely to be your largest purchase to date.

That is why engaging a qualified agent who does this routinely can be crucial.  Zach Adams has extensive experience writing purchase agreements for new buyers and experienced real estate veterans alike. His approach includes educating clients about the options available and the risks and rewards inherent in each.

Zach has a proven track record in the west metro of Minneapolis and the wisdom earned across 100s of transactions. He’d love to help you no matter where you are in the process-- from locating the right property, to submitting a competitive offer, through closing on the home of your dreams.

Contact Zach today at 612.845.7890 to get started.

 

 

 

Oct. 9, 2018

Homebuyer Basics: Beginning Your Home Search with Four Simple Steps

While online listings and web-based tools have simplified the process, your home search could still benefit from one crucial component-- planning

 

Home SearchSearching for a new home has never been easier. With online listings and virtual tours, a few clicks can give you a sense for a merits of a property before you ever set foot in it. While this can help you cast a wide net, the sheer volume of listings can sometimes be overwhelming.

In order to cut through the noise and make the most of your time, it may help to add some structure to your search. A few simple steps can help.

Step 1- Begin with Goals: Define Your Must-haves and Nice-to-haves

Nearly every home purchase ultimately involves compromise. Arriving at the best destination means defining where you are willing (or unwilling) to do so. This means carefully considering your goals for the future and the components of a new home that can help your family meet them.

By prioritizing and classifying these as wants -vs- needs you will be able to assess a given property objectively. Recognizing success is a lot easier if you put pen to paper to define it first. This step in the process is also a good way to get multiple stakeholders on the same page and balance perspectives to develop group priorities.

Step 2- Build some Geographical Constraints

School districts, neighborhoods, commute times and proximity to places you visit can help create another important filter. Perhaps you know your search area well, but even so, getting in a car and driving the nooks and crannies can uncover pocket neighborhoods you never imagined.

Geographical concerns also present an opportunity to leverage the wisdom of experience by engaging a local agent. He or she will know your general search area well and can help you refine your search by offering an extensive knowledge of the local community, resources and homes.    

Fall Home Search

Step 3- Create a Saved Search

According to the National Association of Realtors, buyers spend on average six to eight weeks searching for a home. In a competitive environment this can mean scores of viable properties falling on and off of your radar.

Counting on diligent daily searching as your main avenue to keep track of listing can be hard for busy families. Instead it may make sense to engage an agent to build a custom saved search that brings the listings to you. This will ensure a steady flow of viable options into your inbox, taking the burden off of you, while putting you squarely in the director’s chair.

Step 4- Visit Some Contenders

While your computer can go a long ways toward simplifying your search, it is a poor substitute for your best tool-- your shoes. Inevitably through this process you will find homes that are close, but the way to define if any of them are actually "home" is to visit them.

What’s more, visiting multiple homes (even those that aren’t quite right) will help you understand what is available within your budget, and make the right home stand out even more. Said another way, if you want to get married, you should probably go on a few dates.

Most buyers can expect at least two or three home tours before zeroing in on a property.  Any reputable agent will be more than happy to make that happen. So be sure to visit homes, ask questions and verbalize what you think works (and what doesn’t) for each of them.

The Bottom Line

The information age puts home search tools at your fingertips, making searching a breeze. However, taking this data and synthesizing a clear path forward requires a systematic approach. Supplementing the many tools available by working with a local agent who has hundreds of residential transactions under his or her belt is a key component to adding the structure you need.

Zach Adams has a depth of knowledge about the west metro that is unmatched and he has leveraged this expertise across a broad spectrum of diverse clients to deliver results.  If you are ready to add some structure to your search, Zach can meet you where you are in the process and assist you in defining and executing next steps.

This will happen on your timeline, in your style, with your goals front and center. Contact Zach today at 612.845.7890 to get started.

 

 

 

Aug. 30, 2018

Homebuyer Basics: Engaging a Mortgage Lender

When facing a competitive buying market, two things are key to landing the home of your dreams-- you must be prepared and you must show up well.  By engaging a mortgage consultant early in your search you can simultaneously impact both.  

 

Mortgage Pre-ApprovalWhile purchase price may frequently be the most important factor considered by home sellers reviewing an offer, viability of the buyer can be just as crucial. Sellers simply respond better to buyers who demonstrate they are prepared and serious. Some will even choose an easier path with a lesser purchase amount if they are confident in the buyer and terms.

How can you deliver this confidence to your seller? By making an offer that is free from major contingencies and provides proof that you are creditworthy and able to secure funding.

Meeting with a mortgage lender prior to identifying a property to purchase can give you the leg up you need. Better yet, most mortgage lenders are ready to meet you where you are in the process. This can include any of several levels of prep-- a preliminary conversation, a pre-qualification or a pre-approval. 

Preliminary Conversation

Meeting with a lender for an informal conversation can help you understand the process and timing for securing a mortgage loan. It can also help you build a relationship you’ll need in the future while offering a chance to ask high-level questions.  This can help you determine if a given lender is the right fit for your family as you share goals and discuss products and rates.

A Pre-Qualification

One step past a consultation is the pre-qualification. While similar to a consultation, a pre-qualification requires answering set questions from a lender about income, debt and other financial info. By using this information a mortgage lender can help you dial in your buying power and speak more specifically about how a loan might be structured.  

A pre-qualification can help balance your priorities and give you an idea of payment and terms to aid your search. This is appealing for many buyers because it can deliver directional advice without a financial deep dive or excessive paperwork.

Mortgage Info

Pre-Approval

A pre-approval is the more formal step and is essentially like applying for the loan (albeit a fictional one if you have yet to identify a property). It requires a look at your financial situation, credit report, cash flow and other factors --with documentation required for all. 

The outcome here is more than directional and will spell out precisely the amount of payment you qualify for. Taking this step now will significantly reduce the time and level of effort for the actual mortgage application process.

Following a pre-approval, your lender will be able to supply you with a pre-approval letter to include with any offers you write.  That letter tells your buyer that you have been vetted by a mortgage professional and it can help your offer rise to the top of the stack in a competitive bid situation.

The Bottom Line

No matter which route you choose, it is a good idea to understand your credit-worthiness, options and payment limit prior to beginning a home search. Today’s mortgages offer incredible flexibility, but frequently additional options bring more questions.

Any reputable mortgage lender would be happy to walk you through your choices and their process via any of the services listed above. He or she will also be able to help you understand timing and other logistics if you have a property to sell or other factors to consider. If you don’t have a preferred lender, your real estate agent would be happy to make a referral.

At Zachary Adams and Associates we realize that the mortgage and homebuying process can be confusing. That is why we focus on educating our clients on all facets of the journey ahead of them while serving as a trusted partner looking out for their best interests. We’d love to partner with you to understand where you are in the process and help you take the next steps so that when the time is right, you are ready.

 Contact Zach today to get started.

 

 

Aug. 8, 2018

Homebuyer Basics: Defining Your Budget

How much home can you afford? The answer is a combination of many factors, but properly dialing in a budget is a good first step that can be easier than you think.

 

How Much Can I Afford?Setting a proper budget prior to beginning a home search is an important early step in the process that can make your search more efficient and help you balance priorities.  The good news is that arriving at a ballpark number need not involve tedious expense accounting or a deep dive.

By factoring in a few key data points you can establish a range that can help you vet properties and better understand their potential impact to your lifestyle and your bottom line.

Tip One: Reject the Rule of Thumb

Many may be familiar with conventional wisdom that states that you should spend no more than 25%-30% of your income on a mortgage payment. While this passes as decent advice, there are several inherent issues with this math. First, depending on your additional debt service, credit history and other factors, lenders may simply choose not to lend you that much. Second, approaching any purchase with the “what’s the most I can spend?” mindset can prove foolhardy. While the 25% limit is a good disqualifier of any payment that exceeds it, it isn’t a great way to set a budget.

Tip Two: Understand your Cash Flow

So how can you begin to set a budget? A good starting place is via some high level cash flow analysis using your online banking app. Today nearly every major bank has built-in tools that automatically categorize your expenses and can help you understand your take home pay and other important metrics. These can be invaluable in budgeting for a new house payment.

With only a few clicks on a bank app, you can approximate your average monthly income and expenses over time.  Digging even slightly into these numbers can be eye-opening and identify how much money you are devoting to rent or housing today, how much is available and most importantly, where to find more. By investing a little time to understand your budget, you can reverse engineer an acceptable payment.   

Tip Three: Know your Buying Power

Now that you understand what type of payment you can afford, you need to see what type of home that may support. While any mortgage lender would be happy to put your finances through their paces, dissect your tax returns and tell you exactly how much home you qualify for, the very outset of a home search may not be the time for such a detailed discussion. This doesn’t mean your mortgage pro is of no use to you. While they prefer to speak in absolutes, nearly all of them will help you spitball numbers to understand a theoretical bottom line.

To arrive at yours, simply present the amount you are comfortable spending per month, share your expected down payment and ask them to run the numbers based on prevailing rates. Make sure they include estimates for insurance and taxes in your payment.

To find tax rates and other details, it may help to preview some active listings and use real numbers-- even if they are for a home you have no intention of purchasing.  Ask your mortgage lender to share the impact that changes to term of loan and other factors may present. 

Housing Budget

Tip Four: Begin your Search (but watch your step)

Armed with an idea of your payment and budget you are now ready to begin your search. Keep in mind that making an apples to apples comparison of homes requires you to keep a few additional things in mind. While rate, term and purchase price amount are obviously huge factors in determining a monthly mortgage payment, other factors can play in as well:

Property Tax- Annual property tax can make two strikingly similar listings deliver markedly different mortgage payments. Taxes should be considered early in the process, and you should make sure to include 1/12th of the annual property tax amount in any projection.

HOA Fees- Depending on your search area, some homes may include an HOA fee for community services. These will be disclosed with every listing and their impact should also be carefully considered.

Insurance- You may want to ask your insurance agent to estimate homeowner insurance rates based on the value of home you are targeting. This can help project a payment with even greater detail. You should also understand that if you are planning to put less than 20% down on a home you may also be subject to Private Mortgage Insurance.

Experienced Agent with Local Expertise

Defining a budget is an important early step in the home buying process but one that need not be taken alone.   While the tips above can help you approximate a simple budget, to truly understand your options, it may make sense to meet with a real estate agent. He or she can help you understand mortgage options, connect with finance resources, refine your wish list, understand your target area, build a custom search and much more.

Zach Adams has extensive experience in the west metro of Minneapolis helping families like yours with issues like these. He is laser-focused on Eden Prairie, Plymouth, Maple Grove, Minnetonka and the surrounding communities.  His wisdom is built upon 100s of local transactions and can help you to understand the often complex world of residential real estate in this area.

A free consultation with Zach is a value-add no matter where you are in this process. He’d love to help you define next steps, create a custom timeline and align the resources you’ll need to find the home of your dreams.

 Contact Zach today to get started.

 

 

July 9, 2018

West Metro Dominates Twin Cities Livability

The perfect location for your family is one that supports your lifestyle and goals. While selecting a home can be a complex emotional decision, quantitative data about livability can help you narrow the field.

 

Livability is an important consideration when buying a home-- but it can be tough to define.

It depends greatly on which factors you and your family look for in a community and how those may balance with affordability, proximity to family and friends and other considerations that may inform your search.

While we’d all like to live on the lake in a million-dollar mansion, that may not always be practical.

Selecting a target area for a real estate search therefore is an exercise that is equal parts quantitative and qualitative. When analyzing the former, there are few areas as highly regarded as the west metro.

School District Rankings

An analysis of the school districts for the entire state of Minnesota was completed by the website Niche and the results reflect incredibly favorably on the west metro which is home to six of the top 10. This included a remarkable five schools that received an overall A+ ranking with several others receiving As.

#1 Wayzata A+
#2 Minnetonka A+
#3 Edina A+
#4 Eden Prairie A+
#6 Hopkins A+
#9 Orono A
#28 Osseo A-

Source- Niche.com 2018 Best School Districts in Minnesota

A similar report issued by US News and World Reports looked at college readiness and attempted to rank how well individual high schools prepare their students for secondary education. Again the west metro performed well with each of the major schools earning medals.

Gold Medals- Orono, Edina
Silver Medals- Minnetonka, Wayzata, Chaska, Eden Prairie, Osseo

Source- USNew.com Minnesota Best High School Rankings

Taken together, these studies indicate that in a state that takes public education seriously, the west metro finished at the top of the class.

Parks and Community Events

Another key component to quality of life relates to parks, city festivals and events. The west metro includes many public areas that support outdoor activities.

Of course there is proximity to Lake Minnetonka and the unique cities of Excelsior and Wayzata, but the area also offers several larger regional parks. These include Clifton French in Plymouth, Bryant Lake in Minnetonka, Fish Lake and Elm Creek Park Reserve in Maple Grove. Each offering trails for running, hiking and biking, beaches, disc golf and other amenities.

In terms of festivals and farmers markets, the west metro calendar is packed with options throughout the summer months. The list reflects a public investment in parks and recreation, a key component to livability. Healthy living is a way of life in Minnesota and by leveraging these resources you can ensure your family enjoys the best there is to offer.

National Livability Awards

Perhaps the best validation for west suburban living has come via Money Magazine which has consistently featured cities from the area when ranking the best places in the entire US.

This is a based on a combination of fabulous communities, economic factors, proximity to the metro and significant investment in green space and infrastructure.

Money Magazine Best Places to Live in the US
2017 Minnetonka - 100 Best Places to live
2016 #2- Eden Prairie
2014 #2- Maple Grove
2008 #1- Plymouth

 

The Bottom Line

While livability is a moving target and subjective based on your goals, there is no mistaking that something unique is going on in the west metro.  Overall reviewers found the area economically vibrant and dynamic with incredible schools and public infrastructure bolstered by a prime location near the Twin Cities.

If you are ready to see what all the fuss is about and look into calling the west metro home, we’d love to match a quantitative screen of communities with a list of your must-have features. Together we can find the city, neighborhood and home that is right for you. We have unmatched local knowledge and the wisdom of 100s of transactions matching families to the homes that they love.

An introductory meeting is a great start. Contact Us today to get started.

 

 

Posted in West Metro Life
June 12, 2018

2018 Guide to Summer Family Fun in the West Metro

The kids are off of school and summer 2018 is finally upon us. Finding activities to keep your family engaged need not break the bank. Make it the best summer yet with some free outdoor entertainment options in the west metro.

 

Plymouth Entertainment in the Parks 
Today – August 14th

The city of Plymouth summer calendar of events features many diverse entertainment options centered around one of the most picturesque outdoor venues in area. The Hilde Performance Center features both a large amphitheater and small stage which combine to offer a flexible setting for live music, drama, outdoor movies and much more.

A full schedule is here, but highlights include:

  • June 19th Plymouth Rockers
  • June 28th Plymouth Concert Band
  • July 20th and 21st Prairie Fire Children’s Theatre
  • July 27th Annette Fragale Magic Show
  • August 2nd Kids Fest- ZooMobile/ Jolly Pops / Dazzling Dave
  • August 7th Dirty Shorts Jazz Band

And of course, no summer would be complete without a trip to Parker’s Lake Playfield to view the Shockwaves water ski show, set this year for July 17th.

 

Minnetonka Summer Fest
June 23rd

Minnetonka has laid claim to the weekend prior to the fourth of July on the city festival calendar, packing it with activities and surprises as a part of Summer Fest. The result is the hidden gem of west metro city celebrations complete with games, live music, an ice cream social and of course, fireworks. Additional activities include a tot trot, climbing wall, K9 police demonstration and much more.

Most activities take place at the Civic Center Grounds (14600 Minnetonka Blvd.) or the Burwell House (13209 E. McGinty Rd.) and the city offers an extensive PDF event schedule to ensure you don’t miss a moment of the fun.

 

Maple Grove Days
July 11- 15th

Celebrating its 30th year, Maple Grove Days offers a chance to showcase the northwest suburb over a packed five-day festival. Events include an art fair, fishing clinic, corn feed, tennis tournament and live entertainment. The focus is on outdoor activities throughout the city with fireworks capping things off on the 14th. Those seeking an early start to the fun (and $$$) can even participate in the medallion hunt going on now with clues on Facebook through July 12th.

 

Eden Prairie Movies in the Park
Friday’s in August
Staring Lake Park Amphitheatre 14800 Pioneer Trail

Eden Prairie offers an extensive calendar of events including theater productions, live music and much more, but a favorite end of summer tradition is their family-friendly outdoor movie nights. These take place at Staring Lake Park on Friday nights and always kick off with live music.

Local Farmers Markets

In addition to special community events, local farmers markets offer a weekly entertainment option that can get your kids off of their electronic devices and outdoors. While the herbivore in you will appreciate the produce, it’s really not about the vegetables anymore. Most  markets have expanded into true events that feature food trucks, music and much more.

Excelsior Farmers Market
Tuesdays 2pm -6pm
Water Street, Downtown Excelsior

Minnetonka Farmers Market
Tuesdays 3–7 p.m.
Minnetonka Civic Center Campus 14600 Minnetonka Blvd.

Plymouth Farmers Market
Wednesdays 2:30-6:30 p.m.,
Parkers Lake Playfield- 15500 County Road 6

Maple Grove Farmers Market
Thursdays 3-7 p.m.
Maple Grove Community Center- 12951 Weaver Lake Road

 

Posted in Market Update