Ron & Lynn Wightman, and Randy Brock discuss the different perspectives of multiple offers and all that goes along with them. With multiple offers, what do you have to deal with as a seller? What does it look like as an agent, and what does it look like as a buyer? Strong offers, how to navigate multiple offers while keeping your liabilities low, and home inspections. Also, what’s happening with the spring thaw and spring housing market? Literally how much water is sitting on the ground right now?
Randy’s lovely wife joins him today to chat about education, workforce development, and her career as the Executive Director of Cradle 2 Career in Rochester, MN. http://c2cmn.com We also chat about city growth, where we see it headed, and our own house story.
Music from https://filmmusic.io: “On My Way” by Kevin MacLeod (https://incompetech.com) License: CC BY (http://creativecommons.org/licenses/by/4.0/)
Joining Randy today is Chris Ratzloff, Designated Broker of Property Brokers of MN. Why an independent brokerage? And what is the history of Property Brokers in Rochester, Minnesota? What is its vision? All this plus some hockey talk and the spring housing market…
info@wightmanbrock.com
Music from https://filmmusic.io: “On My Way” by Kevin MacLeod (https://incompetech.com) Licence: CC BY (http://creativecommons.org/licenses/by/4.0/)
In this episode, Ron and Randy discuss how the housing market in Rochester (and other areas) responds to the changing season and the influx of medical residents into the city. How do you adjust, if at all, as a seller, and what should you focus on? What do you expect if you’re the buyer? Despite the Polar Vortex and near-record low temperatures, there are signs of spring upon us already…
Randy Brock and Ron Wightman discuss the basics of who we are, where we came from, why we do what we do, and much more! And of course we dig into the housing market, what’s happening right now and how does it compare to years past.
Like death and taxes, there are a few things certain in life, and at this time of the year, you can count on those leaves falling. If you’re flirting with the idea of letting nature take its course and enjoying a carpet of leaves all autumn, don’t. Come spring you’ll have an anemic lawn, thanks to the mold buildup. Ah, the joys of the four seasons.
But it is possible to take care of that autumn chore and still have time left over to sip apple cider and pick pumpkins. To help liberate you from excessive leaf labor and other fall “musts” for your home, we have provided a simple checklist that will eliminate the guesswork. Click on the link below.
Getting started in home financing can be a challenge. With so many behind-the-scenes processes, documents, definitions and moving pieces, where do you start?
That’s why we’ve enlisted the help of Shannon Olander, a trusted wealth management mortgage banker at Bremer Bank in Rochester, MN. With over 20 years of experience in the banking industry, Shannon specializes in helping individuals and families finance the home of their dreams. Read on as Shannon answers our most-asked questions on home financing.
Moving to a new community, where do I start the lending process?
The first step is to find a trusted lender. I advise to work with a lender you know or a recommendation from friends or family. Having a positive and trusting relationship with your lender is key. Starting this process with someone you trust to handle these personal, financial and organizational intricacies will set a solid foundation for your lending experience.
Before you go any further in the home search, you’ll need to get pre-approved or prequalified for a home loan. If you find out you are approved for more than expected, this does not mean you should buy at a higher price point. Basic budgeting rule number one indicates to always budget for more than you expect. Some things in life will pop up that aren’t factored into your debt-to-income ratio, like day care or routine travel expenses. You’ll need to make sure these costs are accounted for when purchasing a home.
What is the difference between a pre-approval and pre-qualification?
Great question. A pre-qualification is essentially an approximation – a lender has evaluated your creditworthiness and decided you will most likely be eligible for a loan. A pre-approval is when the lender pulls a credit report and looks at the complete picture of your debt-to-income ratio. It’s an official statement from a lender certifying you are eligible for a specific mortgage amount based on the entirety of your financial information.
While a pre-qualification can be helpful to determine how much a lender is willing to give you, a pre-approval can give you that reliability edge to a seller.
What kinds of things can affect home financing after a pre-approval?
Taking out additional credit and not letting us know! After a successful pre-approval, you shouldn’t do or purchase anything that could affect your credit report or your debt-to-income ratio. That means no new car, furniture, job status, etc. Your income, debt and assets are all factors that could affect your pre-qualification status.
Do you have programs for first-time homebuyers?
Absolutely. From down payment assistant programs, rural housing development, gateway program that covers 100 percent financing and FHA loans, we have access to many programs that could benefit you as a first-time homebuyer.
If you have enough in savings for a 5 percent down payment, it’s generally best to go the conventional financing route. Your lender will be able to evaluate these financing options with you and find a route that will best work for your unique financial situation and needs.
How do you combine credit scores for two people applying for a single home loan?
Good question. We pull reports from three separate credit reporting agencies; take the middle score for each person; then take the lower of these credit scores between you and your co-borrower.
For example, if my three credit scores report 650, 700 and 750, the lender considers the middle score at 700. My husband’s agency scores are 700, 750 and 800, and the lender considers his middle score at 750. Between these, the lender would take the lowest of your two scores, which would end up as 700.
Many lenders set their minimum credit score at 640 or higher to apply for a mortgage.
How do you work with someone who has experienced bankruptcy or other credit issues in the past?
Luckily, recent laws have made it easier for someone with a past short sale or bankruptcy to get preapproved for a home loan. Although a typical lender would like to see at least four years since discharge, there are many different options for moving forward with a home loan, even with past credit issues. Your lender will look at your entire financial picture to determine if it’s possible to move forward with a pre-approval.
To help potential borrowers, we also offer credit counseling to learn more about the types of behaviors that determine your credit score and the role your credit report plays in big financial decisions like home financing.
Does refinancing our loan affect our ability to buy another home in the future?
A refinance does not affect the process of a second move. In fact, current homeowners have a few options when looking to move.
An option many people don’t know about is the bridge loan. For homeowners who have earned high equity in their current home, we can pull equity out and “bridge” it from the old to the new property. Don’t have the means to do a bridge loan? Most banks offer what we call recasting of a loan, where the loan amount starts higher but can be recast to bring the principal reduction down and hence, smaller payments.
Nationally, mortgage rates have been on the rise, up 48 percent since 2011. What are your thoughts on the interest rate increases and what this means for potential buyers?
I’m glad you asked this question. Mortgage interest rates are certainly on the rise, with the average rate for a 30-year fixed mortgage between 4.375 and 4.5 percent. And although they are gradually on the incline, the keyword here is gradually. When I first started in the market, the average rate was just around the 8 percent mark and it was still a great market. Interest rates are not the end-all, be-all of home buying – people will move regardless. And, it’s a good thing rates are gradually inclining and not jumping.
What are potential challenges for borrowers here in Rochester?
Our biggest challenge is one of inventory – there are simply not enough houses on the market to meet demand, and homes on the market are selling extremely quickly. In fact, there are an estimated 40 pre-approval applications in our office right now, waiting to be processed.
Price point is another challenge for potential buyers in Rochester. Since higher price ranges have higher inventory, it makes competition even more fierce for the average or first-time home buyer.
From a lending standpoint, however, this housing shortage is not affecting appraisals, and we are able to work quick on our feet based on client needs.
If you are starting the home buying process or have questions about options for home financing, we’d love to help you get started. Contact us today.
what they are, why you should get one and what they are not…
Congratulations, your offer was accepted and you’re going to be a new homeowner! Before the celebratory glass of champagne, there’s one step you still need to consider: the home inspection. Home inspections give buyers an idea of their new home’s condition, and is highly recommended on any property you purchase – especially one that is not new construction. Here are our top reasons why you should absolutely have a home inspection, and then our top three things home inspections are not.
The home inspection is your opportunity to accompany a certified professional throughout your potential new home. He or she will look at the major components of the home to make sure everything is structurally sound with the property. These commonly include an evaluation of the home’s foundation, siding, windows and shingles. They will also point out any immediate safety concerns such as evident mold issues, gas leaks, ungrounded outlets and loose electrical wires. The inspector’s job is to make you aware of the complete basic status of your new home, and help you create a list of things to be taken care of immediately upon move-in.
This is your opportunity to be there during the home inspection to ask questions and gain a better understanding on what your responsibilities will be moving forward to maintain your property. The inspection process will give you better insight to how well the property has been maintained up to this point, potential problem areas and items to budget for in the future. Your inspector will provide a detailed, written report on the information gained during the inspection – it’s a good idea to keep this report handy the first year in your new home to reference and budget with. As three to seven years is the average homeownership period, use this timeline to budget for and take care of any outstanding items from the initial inspection report that should be addressed before transferring to another buyer.
Now that we’ve determined what a home inspection is and why you should get one when searching for a new home, there are a few things to keep in mind of what a home inspection is not.
First, the home inspection should be part of the conversation on your offer, but it is not a sole reason to renegotiate the price with the seller. Although you can retract a purchase agreement on an inspection contingency, you should never tie up a house while continuing to look, knowing you have an “out”. The seller has agreed to the home inspection terms in good faith that you are interested in purchasing their home.
Second, a home inspection is not a guarantee that everything is going to be perfect. The home inspector will do their best to identify all the areas of your new home to be aware of, but the inspection report should be viewed mostly as a guide as you move forward to understand what you just purchased.
Lastly, a home inspection is not supposed to be an end-all, be-all list to transform this property into a new home. As property ages, new codes and restrictions come into play, and if you are not purchasing a new construction property, chances are there will be items in the inspection that are not entirely up to most recent code – and that’s okay! The inspector is looking for major structural issues with the property that will keep you safe in your journey of homeownership.
Understanding why you’re having an inspection, and how you can use the results of the inspection in the first few years of owning this home, is pretty important. There are many insights to be gained from a home inspection, which is why we always advise to have one where necessary.
If you’re interested in starting the home buying or selling process, we’d love to meet with you. Contact us today.
When the market is fast-paced and the inventory of homes for sale is low – like the current market in Rochester, Minnesota – you have to act quickly if you’re looking to commit to a home. Because of this pressure, acting too quickly can cause some to feel buyer’s remorse after the process is over.
The good news is, we have some advice to avoid buyer’s remorse – by identifying and remembering your priorities in the home-buying process.
We often advise potential home buyers to prioritize their top ten things they want in a home. Of these, then identify your top three non-negotiable, must-have items. Identify and solidify these are your top-tier priorities, and the remaining seven items on your list remain there as want-to-haves, or nice-to-haves.
Having a list of your top three objectives is important because you want to be able to quickly articulate these in conversations with your key decision makers in this process – your spouse, partner or family. You’ll also want to be able to articulate these in conversations with your real estate advisor so they can help you find a home that is perfect for you.
In a fast-moving market like this, it’s important to understand that when a property just comes on the market, you’ll likely be competing with two or three other interested parties. Most often people have buyer’s remorse because they get caught up in the visual appeal, the hype and competition of purchasing a new home, and they make an impulsive offer on a new, shiny house – even if it lacks one or all of their non-compromise items they were looking for.
Each home buyer’s experience is different. You don’t have to have three items on your non-negotiable list – maybe it’s just two. Before you make an offer that will compromise your top tier objectives, be sure to have a serious conversation with your fellow decision makers and your real estate advisor so you can best determine if it’s the right choice for you to proceed on making an offer that compromises your must-haves.
One last point to consider is that your list can change! Especially if you’re just getting started in the market, you might come into the home buying experience with a certain idea in mind – but once you start the process and see what’s out there, you reprioritize the objectives that are important to you. It’s a good idea to continually revisit your list throughout the process to truly find a home that’s right for you.
If you’re interested in searching for a new home, we’d love to meet with you to talk you through the process. Contact us today.
Between the stress, time and hidden costs associated with moving, it can be tempting to want to pinch pennies when making an offer on a new home. You might have even thought about pitching a lowball offer. By definition, a lowball offer is considered an offer below the market value of a home. But if you’re committed to buying your perfect home, is a lowball pitch one you should be making? With nearly 20 years of real estate experience, we’ve seen what works and what doesn’t.
Is it okay to pitch a lowball offer? The short answer: yes, no and maybe.
Take a group of friends for example – Monica, Ross and Chandler. Monica is working with an experienced real estate professional to find a home in Rochester. After looking at properties and doing their homework on the current market and surrounding community, her and her realtor found the perfect home – but it’s clearly overpriced for the current market and neighborhood. Because Monica found a house that checks all her boxes, but knows from working with an experienced agent that it’s priced above market value, Monica has sound reason to make an offer on the home that is lower than the asking price. In this scenario, we would encourage Monica to counter with an offer for a fair market price, even if it might be less than what the seller was asking.
Before looking at properties as a potential buyer, we advise to identify your top three non-negotiable items you’re looking for. When asked to list his top three criteria in a new home, Ross wants a three-car garage, stainless steel appliances and a fireplace. If, like Ross, your top priority is not to find the absolute lowest, best price on a property – don’t pitch a lower offer. If you’ve found a house that meets all three of your criteria, and the cheapest house is not one of those, don’t make a lower offer.
However, if, like Chandler, you are specifically looking for an investment property and it is your top priority to get the best possible deal you can find in Rochester on any given day – then maybe make a lower offer.
In short, there are few situations where we would recommend a true lowball offer. If after due diligent research and consultation with a trusted real estate professional, we always recommend negotiating a good fair market price for a home that meets all your criteria.
If you’re starting the home buying process, we’d love to meet with you to talk through the process. Contact us to set up a meeting today.
Getting started in home financing can be a challenge. With so many behind-the-scenes processes, documents, definitions and moving pieces, where do you start?