Jan. 17, 2022

Top 6 Reasons Realtors Recommend Getting a Home Inspection

You may have heard stories of people buying a house sight unseen and waiving inspection, so why is it so important to get a home inspection? Let's take a peek into the world of homeownership. Lingering questions? Contact us today to speak with an experienced Twin Cities realtor!

1. Peace of Mind & Education

  • One of the most important reasons to hire an inspector is to gain peace of mind and learn about the home you're purchasing.
  • Inspectors are incredibly knowledgable about homeownership and give advice on how to maintain your home in the best way possible.

2. Add-On Services

  • Our top 2 recommended add-on services are radon tests and sewer scopes. Depending on the condition of the house you may wish to add on other services as well.
  • Radon Test 
    • Radon is an odorless gas in soil that can enter homes through the foundation. It can be detrimental to you and your family's health if left untreated. 
  • Sewer Scope
    • A licensed technician will use a camera attached to a long cable to record the entire stretch of sewer from the house to where it connects to the city's pipes. 
    • If any problems arise in a sewer line, it is the homeowner's responsibility to repair the line, which can be an extremely costly expense. 
    • We have seen countless broken sewer lines in the past two years and encourage every client to add this to their inspection!
  • Mold Test
  • Moisture Identification
    • Inspectors can use infrared scanners to identify areas in the house with a moisture presence.
    • They will also check the attic and crawl spaces for proper ventilation.
  • Rodents 
    • Inspectors will identify areas in the home that may allow rodents to intrude and give recommendations on how to fix those areas.

3. Appliances

  • Inspectors will test all appliances in home (depending on weather), to ensure they're functioning properly.
  • They will let you know how old your large appliances are and what their life expectancy is.
  • This information is vital to homeownership and potentially avoiding a big expense or having time in order to budget for replacement.

4. Exterior Condition

  • Inspectors provide important information about the condition and materials used on the exterior of the house.
  • They will evaluate the grading of the land surrounding the house's foundation.
  • They evaluate the condition of the roof and give an estimate of age. Inspectors will also identify any potential leaks or areas prone to damage.
  • Unfortunately, it is impossible for inspectors to analyze a roof that is covered in snow, which can making buying a house during a Minnesota winter a little difficult! In that instance, it would be helpful if the current homeowners know when the roof was installed.

5. Electric

  • Inspectors will test all electrical outlets to ensure they are properly grounded and ensure GFCI outlets are installed where necessary.
  • They will examine the electrical panel to identify corrosion or any potential problems.

6. Structure

  • Inspectors will identify any existing cracks or settling in the foundation of the house.
  • They will examine the supports in the house to ensure they are properly spaced and working to support the structure.

There are many great inspectors throughout the Twin Cities, let us know if you need a recommendation. One of our realtors will be in touch as soon as possible.

Posted in Buying a Home
Jan. 10, 2022

A Realtor's Guide to Closing for First Time Homeowners

Here is a brief overview of what to expect when you're in the process of buying a house. Lingering questions? Contact us today to speak with an experienced Twin Cities realtor!

1. Submit Earnest Money

  • Many realtors have the ability for you to submit earnest money electronically. Otherwise a check will work too! This must be submitted within 2 business days of offer acceptance.
  • It will be held in a brokerage's trust account until closing day when it gets applied to your down payment or closing costs.

2. Schedule the Inspection

  • The inspection period is typically 5-10 calendar days.
  • 2-4 hours depending on house size.
  • Adding a radon test & sewer scope may help you save money in the long run.
  • $500 - $1,000 depending on services & house size.
  • May result in more negotiations between parties.
  • Inspectors will provide an extensive summary of the property's condition and give recommendations on repairs that should be made. 
  • They will also provide serial numbers for many large appliances. 

3. Title Work

  • Title companies manage the closing of your home.
  • The title agent will also ensure there aren't any liens or encumbrances on the property. We can set you up with our favorite Title Company that will take care of the transaction seamlessly.
  • They will send updates as paperwork is processed and arrange an appointment to sign papers on closing day! 

4. Final Walkthrough

  • The final walkthrough gives you one more opportunity to tour the house before closing day!
  • This typically occurs on the day before or day of closing.
  • Minnesota law requires that sellers clear all debris and personal property not included in the agreement by closing day. 

5. Closing Day

  • Sellers will sign their papers a few days prior to closing at their own title company.
  • Buyers will sign on closing day at their title company-- we will attend for moral support!
  • We'll hand over the keys, and the house is yours!

Email us any questions you have about the buying process. One of our Twin Cities realtors will be in touch as soon as possible.

Posted in Buying a Home
Jan. 4, 2022

First Time Homeowner FAQs - Answered by Realtors

Reach out today to learn the ins and outs of buying a home from one of our Twin Cities realtors!

1. How long does it take to buy a house?

From the date you get an offer accepted on your dream home, it typically takes 30-45 days to complete the transaction.

2. How much money do I need to buy a home?

  • Earnest Money - A deposit (1% - 2%) you make when you submit your offer to show a seller you are serious about the home. This will be applied to your down payment or closing costs.
  • Down Payment - A percentage of the purchase price that you will pay at closing
  • Closing Costs - Typically 3% of the purchase price to cover lender charges, title company fees, processing expenses, etc. 

3. What kind of loan do I want?

  • Conventional Loans - Conventional loans have down-payments that can range from 3% to 20%. 
  • FHA Loans - Insured by the Federal House Administration, these loans start with down-payments as low as 3.5%. 
  • DVA Loans - US Veterans may be able to qualify for a loan with a down-payment as little as 0%. 
  • Still not sure? Ask the experts. We can help connect you with experienced lenders who are able to answer all of your questions about home loans. 

4. How do I pick a lender?

  • We recommend interviewing 2-3 lenders to find the right fit for you.
  • A local, reputable lender is typically best.
  • Ask friends & family for a referral to a lender they have had a good experience with.
  • Ask the experts. We can recommend our "go-to" lenders who have great testimonials from our clients.

5. Should I buy Single-Family or Multi-Family?

This is different for everyone! If you are interested in earning rental income to pay your mortgage, a duplex may be a great fit for you! Many of our agents have personal experience owning multi-family homes and would be thrilled to discuss their experience with you!

6. What should I know about mortgages?

  • Down payments typically range from 3% to 20% of the purchase price.
  • If your down payment is less than 20%, you will be required to pay private mortgage insurance until you've put 20% equity into your home.
  • Your lender will go through each option in depth with you to find the best fit.

7. Why should I buy instead of rent?

  • A mortgage payment may be less than a rent payment and helps you build equity. 
  • The value of your home will likely go up over time. 
  • You will have a space to make your own. 
  • You will qualify for more income tax deductions as a homeowner.

8. What if I have had bad credit?

You may qualify for a loan backed by the Federal House Administration. The program will insure your loan, so your lender can offer you a better deal and a lower downpayment.

9. What if I don't have much for a downpayment?

  • There are different ways we can work with what you have!
  • FHA Loans require 3.5% downpayment, versus conventional loans up to 20%.
  • At times, sellers will pay up to 3% of a buyer's closing costs, which helps keep money in your pocket at the closing table!

10. What does "contingent" mean?

When a house for sale has received and accepted an offer, but additional criteria must be met before finalizing the deal.

11. What is an appraisal?

  • An appraisal is a value established by an unbiased third party to ensure you're not "over-borrowing" money from the bank.
  • An appraiser will inspect the property's condition, features, and comparable properties nearby to determine an opinion of value.

12. Who pays for an appraisal?

The buyer pays for the appraisal. This may happen at closing, or your lender will have you pay for it upfront. Appraisals cost about $500+ on a single-family home.

13. Who pays the realtor?

The seller's agent earns a commission from selling the house and splits their earnings with the buyer's agent. This is typically 6%-7% of the sales price in the Twin Cities market. Buyer's agents typically earn a 2.7% commission.

Example: 6% listing agent commission = 3.3% Seller's Agent Commission + 2.7% Buyer's Agent Commission

14. Should I get an inspection? 

  • Yes! Inspections can save you tons of money in the long run. Once you have your inspection, your realtor can negotiate on your behalf to get things fixed before you move in. 
  • Inspections can cost $500-$1000 depending on the services requested. We can recommend a few of our trusted inspectors to help you throughout the inspection process.
  • We highly recommend testing for radon and getting the sewer scoped.
Posted in Buying a Home