Do It Yourself Home Buying? Not Worth It!

We live in a do it yourself culture. We have do it yourself big box stores galore! We self-serve our gas and some of us don't remember a time when gas was pumped for us by the service station owner and employees. We can get cash from our bank accounts without any assistance and we bag our own groceries! Remember when we tried to be our own stockbrokers? For most people, trading stocks and bonds wasn't a good idea and even got some people into financial trouble. Our home purchase is a huge investment. Perhaps our home purchase is the largest financial transaction we make. There are lots of vibes in our popular press about how consumers can do it yourself when it comes to purchasing our homes.

The question is, can we really do it ourselves? Do we operate on ourselves? Scale our own teeth? Provide veterinary services to our pets? We don't represent ourselves in a courtroom. Most of us don't attempt to service our own cars. Why is it we think we can help ourselves to and through the process of purchasing our homes that requires legal offer documents, post-offer procedures like inspections and appraisals, complex financing arrangements, reviewing title documents and navigating through the closing?

It looks like a fun and exciting process, doesn't it? Put people in the car - oh, that part anyone can do. Right? Consumers feel they can drive themselves around to look at houses. Perhaps consumers feel finding open houses is all that's necessary. Sellers who are listed with an agent are represented by an agent. An unrepresented consumer who calls a list agent to arrange a property showing winds up taking representation from the listing agent which creates dual agency. That might not be what the do it yourself consumer has in mind - right? The other alternative – no representation? Does anyone really want to be unrepresented amongst professionals? I don't think so. Do it yourself-ers haven't been able to figure out how to prepare a legal offer on their own - right? When an offer is prepared by an exclusive buyer agent, the offer to purchase contains about 14 pages of legal documents. Professionals are trained to make offers and negotiate the offer once it is delivered.

Finding houses for sale seems like fun. Do it yourself-ers can find houses too. Is that correct? When a consumer finds a house for sale on their own they don't have interact with someone they don't really know. Is that the draw? The internet makes finding houses easy and no need for an agent. Right? The last I heard there are 17 different MLS services in our metro area. Our metro area has broker reciprocity which means we share listings amongst brokerages and most metro area brokerages post the listings on their individual websites. Consumers can search themselves. We encourage consumer education including encouragement of consumers to interview real estate professionals before they hire an agent to work with. A professional takes the time to search seriously with attention to details as related by words and actions from the consumer-client. Some thing to think about: if left alone, a consumer who wants 3 bedrooms and 2 baths searches for 3 bedrooms and 2 baths. That consumer may miss great properties with 1 more bedroom or 1 less bathroom or a property that has the potential for adding a basement bathroom and has a fantastic backyard or new siding or a property with 1 less bath and a great room addition.

Working with a real estate professional - an exclusive buyers agent is the industry gold standard for consumers and we look forward to working with you!

Cindy Bhimani

All About Chanhassen

Chanhassen is a suburb of Minneapolis. It’s a comfortable area know for locally for the Chanhassen Dinner Theater, the Arboretum, and Prince’s Paisley Park Studios. It’s a fun place to visit and a great place to live.

Quick Stats:

• Population (2006 estimate) - 23,520
• Median income (2005 estimate) - $93,800
• Education level BA/BS or higher (2000 Census) – 53.1%
• Average House Market Value (2005) - $336,800
• Owner occupied homes - 89.6%

For more information, visit the City-Data site or the City of Chanhassen web site.

To learn about Chanhassen and other communities, visit the Buyers Real Estate Group web site.

90210 – not in Minnesota

Forbes recently published a list of the 100 most expensive zip codes in the US. No Minnesota zip codes made the list. We like to think of this as being great news – because it means that despite the high quality of life in Minnesota, it’s not fallen prey to the economic extremes as other places in the country.

Inspectors, Even for New Homes

Looking at buying a new home or new construction? Get a home inspection. There’s a temptation with a new home to think that everything will work because – well it’s new. But that isn’t always the case.

A new home can run into just as many problems as an older home – after all no one has lived in the house to test out the appliances, the windows, the heater and more. Most builder are trustworthy – but they still run into problems and a builder's warranty eventually expires and coverage is very limited after the first year.

A home inspector can help you diagnose future as well as existing problems.

Submitted by Ron Jensen

Real Estate License Primer

Every 2 years real estate agents must complete 30 hours of classroom continuing education. The education must be approved by the State of Minnesota Commerce Department. This requirement varies state by state.

My licensing renewal happened this summer. By springtime I had most of the credits I needed to complete the 30 hour requirement. I decided to take the 30 credit broker course! I was in a classroom all day for 5 days in May. I haven’t taken the broker’s exam yet but I have a year and I’ll get it done. At the time I pass the exam and continue to practice real estate under a broker I will become a “limited” broker working under my broker.

It seems like every year documents change in real estate. Along came a chance to start fulfilling my 30 hour requirement for the next 2 years with a legal forms class offered in August. The class was close to my home – even better! Filing in for the 4 hour class, we all parade past cookies, canned pop, coffee and water. What could be better? The room was full to capacity with a few hundred real estate agents.

It turns out our forms change largely due to the State legislature making statute changes that become effective in August. If certain real estate issues have arisen or a particular amount of litigation has happened, then the attention of our government representatives gets focused on making changes in our State statute. Changes are also initiated by our own trade organization on the advice of legal counsel and a forms committee made up of peers.

Some of the things I learned and will help you stay in the “know”:
1) Minnesota Dept of Corrections phone has changed and all forms with that number included must be changed.
2) Financing is not cash. Cash is cash. I thought this was kind of intellectually humorous but, there are people who feel the financing they get makes their purchase a cash purchase and that’s not so.
3) Do not initial Purchase Agreement pages.
4) Provide copies to all parties in a timely manner and faxes are problematic. The best way to provide copies is in person.
5) The Arbitration Agreement and Seller’s Disclosure are not part of Purchase Agreement and should not be numbered.
6) If the Seller’s Disclosure is included in the page numbering then the Disclosure could be legally deemed a Warranty. The seller’s disclosure is purely information and not a warranty.
7) Buyers pay for their own Owner’s Title Policy.
8) There is no more break down on the Inspection Addendum for what is going to be inspected and it is noted the inspection is at the Buyers expense.
9) As a result of the inspection, the buyer must bring objections to the seller in writing.

I learned a lot more but I thought I’d give you a quick summary. The new forms are currently already in use. It turns out the 4 hours I spent in my latest continuing education class was well worth my time.

Cindy

All About Eagan

Today we are starting a new feature where we highlight a specific area in the Twin Cities. We’re starting with Eagan, in Dakota County.

Eagan is a thriving suburb of the Twin Cities metropolitan area located approximately 15 miles southeast of downtown Minneapolis. The high school has been twice named a "Nationally Recognized School of Excellence". In 2006, it was rated the 12th best place to live in the United States by Money Magazine. Learn more on Wikipedia.


Quick Stats:

• Population (2006 City Staff estimate) - 67,448
• Median income (2000 Census) - $67,388
• Education level BA/BS or higher (2000 Census) - 49%
• Average House Market Value (2005) - $263,458
• Unemployment rate – Eagan - 3.0%

Parks – 54


Learn more on the City of Eagan Web site.

Determing Local Commutes in the Twin Cities

So you’re thinking about moving into a new house. One thing you want to consider is your daily commute to work. If you want a rough stimate, consider checking out MapQuest or Google Maps each will give a route, miles traveled, and estimated time.

If you want to factor in traffic and construction as well, check out 511; it gives real time traffic reports. If I were really interested I would periodically check 511 during the times I expected to travel to see if any of my major routes were consistently trouble spots.

Want to know the cost of your commute? Check out Commuter Choice.

For more home buying tips, check out Minnesota’s Buyers Real Estate Group.