Are you ready to buy?

Market conditions are favorable for first-time buyers, but that doesn't necessarily mean you're ready to make the leap. Here are some tips to help you decide if you're ready for home ownership.

1. Take a first-time home buyer class. It will give you an overview of the steps you need to take to be ready to buy a new home and cover items such as the Pro's and Con's of buying, the hidden costs of home ownership, and Do’s & Don'ts for the home buying process. Here are some upcoming classes offered through Minneapolis Community Education.

2. Get pre-approved. Talk to a lender at the beginning of the homebuying process. They can advise you if there are some things you should do to improve your credit score first, then pre-approve your financing. By arranging for financing before you start looking for a home, you'll know exactly how much you qualify for. It may save you the heartache of falling in love with a home you can't afford or losing the right home for you because your financing isn't ready. Here's a mortgage checklist to help you prepare for your loan application.

3. Be conservative. The longer you plan to stay in the home you're buying the more you may want to stretch, but be careful not to stretch too much. Borrowing too much can mean stretching and sacrificing to the point that it's hard to enjoy life in your new home.

4. Consider all the costs. Remember that it's not just a mortgage payment you have to worry about. Be sure to also budget for utility costs, maintenance and repairs.

5. Play house. Try banking the additional amount you'd have to pay if you owned a home each month for a few months to get a better sense of what the payments will feel like. It can help you determine if you're ready for the real thing...as well as build a cache of funds you can use for your move.

Quality Living

I've been spending a lot of time in St. Louis Park lately, a first-ring suburb of Minneapolis. For one thing, that's where our son's family lives and we had fun hanging out with them yesterday, spending a rainy afternoon at the Minneapolis Institute of Arts (MIA). Our grandson was fascinated by the Chihuly glass Sunburst, especially appropriate when looking for the sun on a cloudy day.

From a real estate perspective, I've been working with several people buying and selling in St. Louis Park lately and am reminded how the decades-long explosion out to the suburbs and beyond seeking bigger and newer may be coming to an end.

Today's focus seems to be shifting to higher quality...not just in materials and living spaces but also towards a higher quality of life. Although that translates to different things for different people, for many it means not spending so much time commuting and trying to keep living expenses more in check to allow more time for things like spending an afternoon at MIA. It also means living in a neighborhood that has a sense of communty.

A recent article from REALTOR Magazine Online headlines that 'Buyers Say Size Doesn't Matter'. Although the size of the average home grew from 1,500 sq ft in 1973 to 2,495 last year, architects, builders and designers are saying buyers are now choosing to put more focus on quality living spaces rather than ever-increasing size. Predictions are formal living rooms will evolve into a library or music room...master suites will increase...and new homes will continue to have high ceilings, meaning homes will still have a feeling of spaciousness even with smaller square footage.

This echoes the 'Not So Big House' philosphy of Sarah Susanka, whose inspiration came from a growing awareness that new houses were getting bigger and bigger but with little redeeming design merit. The problem is that what makes a house feel like home has almost nothing to do with how big a space is...it has to do with how we shape our homes to fit the way we really live.

As you prepare to buy a home, think about what quality living means to you...what is important to you not only in a home but also in community and lifestyle. Think about your daily rhythms...what you want to keep, what you would like to change with your move...and thoughtfully make your choices in both location and housing accordingly.

To Buy Now or to Wait...that is the Question

There's no doubt the market has been putting buyers to the test trying to decide whether it's the right time to make a move or whether they should wait a bit longer.

I was talking with a trusted lender who said he had been thinking about this very question and felt it was rarely beneficial to wait if you're ready to buy. The two primary factors to consider are rising interest rates and falling housing prices. He calculated that if interest rates rise .5%, housing prices would have to fall another 5% to make up the difference. Overall housing prices are currently relatively stable, neither rising nor falling significantly, indicating waiting isn't likely to be of benefit.

The past decade has been one of low interest rates coupled with unsustainably high home price appreciation as the supply of homes available for sale struggled to keep up with demand. As a result, home prices increased a dramatic 50.6% from 2000 to 2005. Unfortunately, consumer income didn't keep pace with housing prices, rising only 12.9% during the same period. This resulted in decreased housing affordability, which planted the seeds for our current market conditions.

In 2006 we saw a needed pause in the market...not only natural and expected after unsustainable price growth, but much needed to put our market back in balance. Home price growth stabilized in 2006, with prices relatively unchanged over 2005. Jeff Allen, Minneapolis Area Association of Realtors Research Manager, predicts that 2007 should be pretty stable with 2006 overall, with a bounce back beginning in the later part of 2007.

Flat housing prices and continued historically-low interest rates have improved affordability, creating a good environment for first-time homebuyers...a necessity for a continued healthy and growing housing market. If you're ready to buy, it's a good time to make a move.

Click to see the full Twin Cities Metro 2006-2007 Market Analysis by Jeff Allen, MAAR Research Manager.

Open House

The weekend was a forerunner to this beautiful week...it topped 60 degrees today!

People were out enjoying the weather this weekend, a perfect time for an open house. I had 28 groups of people through the house I had open on Sunday. It was interesting seeing the mix of people coming through... from just starting to look to ready to buy... from trying to decide whether to remodel or buy another home to getting ready to sell...from checking out neighborhoods to checking out other open houses while theirs was open...from looking around without their agents to searching for an agent...

Open houses are a great way to check out agents...it's a non-threatening way to get a feel for an agent. It's also a good way to get to know the market, both for pricing and for getting a feel for neighborhoods. One of the first steps after securing financing is deciding the area where you want to live.

Location is vitally important because while you can change the appearance of a home, you can't change it's location. If you don't like the neighborhood, the traffic, the view, the surroundings, there isn't much you can do except live with it anyway or move to a new location.

Don't skimp on your homework selecting WHERE you want to live...your sense of place can have a profound effect on your whole sense of well-being. Once you have that figured out you can focus on finding the specific property that's the right fit for you.

It happens over and over again that people 'feel' the right property almost as soon as they walk in...they don't even have to see the whole home before they know it's the right fit. Be patient and listen to what your body is telling you as you visit different homes...if you listen, you'll know when you've found the right home for you!

Spring

It's hard to believe that last week we had a dump of more than a foot of snow and now we're heading into the 40's and 50's. That, along with the daylight savings time shift tonight and the vernal equinox less than 2 weeks away means spring is really coming!

My compter went into hibernation...actually worse, the hard drive crashed and I've been 'making do' with various computers while bringing mine back to life...a slow process. The worst part of the whole thing was the discovery that the new website I'd been working on for the last couple months wasn't backed up!! Oh, well...it will be re-built even better...only much later!

Spring season is starting...I was out with clients yesterday slopping through muck and mud...a true sign of spring. We also had multiple offers on a new listing this week...another sign that spring is on the way.

If you're thinking about buying, it's time to spring into action. Don't neglect getting pre-approved before seriously looking, you never know when you're going to find the home you want to buy! Case in point...in reviewing the offers this week the buyer that was chosen was already financially underwriting approved, just waiting for a property.

You've no doubt heard the news stories about mortgage horror stories and companies going out of business. This makes true pre-approval, not just 'looks good' approvals, even more important.

A reputable mortgage company and trustworthy loan officer are also vitally important. Buyers need to know they will truly be able to afford their home and won't face rising payments and/or interest rates that may force them out in the future. Sellers want to feel confident their home will not just get a signed agreement, it will actually close!

Clutter Control

When you're getting ready to sell your home, one of the first steps is getting rid of the clutter. This is all part of home staging, which involves cleaning, organizing, rearranging, updating and preparing your home for sale.

A large part of why people buy a particular home is emotional. This is one of the reasons home staging is so effective - you create an atmosphere that projects pleasant times to come in a well-cared for, fresh, bright and uncluttered home.

A good way to start is to walk through your home and make a list of every spot, chip, area that needs cleaning, de-cluttering, repainting, sanding, updating, etc. Then check them off your list one at a time as you complete the tasks. It's not so overwhelming when you tackle one thing at a time, and checking them off your list demonstrates the progress you are making so you can reward yourself!

I can't tell you how many times people have told me they wished they would have done the work they did to prepare their home for sale years ago...so they could have enjoyed it while they were living there!

If you are ready to start getting your clutter under control but need some help and encouragement, you might find a new offering by professional organizer Kathy Franzen helpful. She found so many people looking for this kind of support that she is starting a 'Clutter-Free Life' encouragement group. It's an ongoing small group that meets every other week to share ideas, support one another and receive expert advice as they work on their own home or office organizing projects at their own pace. For more information, call Kathy at 651-486-2720 or visit www.ProjectPartnerServices.com.

Sellers, I want to show your home!

Sellers, are you wondering why you aren't getting any showings? It could be due to any number of factors, including slow market conditions.

However, don't let it be because agents can't get an appointment to show your home!! I am currently working with a well-qualified buyer who is planning to make an offer on a home this weekend. He has a few properties he is considering, but there is another one he would really like to see...it could be a contender. Only problem is, I haven't been able to schedule a showing. I've been leaving messages at the contact numbers in the listing for a whole week...not a single response! Today I tried again and didn't even get voicemail...perhaps it's full.

Agents, answer your phone and return messages! Buyers, make sure you know the procedure for setting up showings...if they go through the listing agent, what happens if the agent is unavailable? Is a backup plan in place?

I could be bringing a buyer for your home...but none of us will ever know unless we can get in to see your property!