Sold by Jared Jacobs – Rochester MN Real Estate Blog

Should you wait until the market rebounds to sell your home? And yet, some potential sellers wonder if they’re better off waiting to sell until the market recovers. It really depends upon your ultimate goals of course, but if you’re at a stage where you need a larger home, then read on.
This is one of the best move-up markets EVER! Let’s talk more about that. What makes it so?
Low, low prices! Very few areas of the country have been immune to the decline in values. And for many areas (especially those with the first and steepest declines), have stabilized and even ticked up slightly during the spring selling season while anxious buyers worked to comply with the First Time Home Buyer’s credit.
Low, low interest rates! There was rumor that interest rates would tick back up after the first quarter of the year, and that has not come about. Instead, we’ve seen rates dip, to unbelievable levels.
Higher basis when we again see appreciation. Most of the country has faced market depreciation over the last few years. When we see market appreciation again the appreciable base in a more expensive home will be larger than that of a less expensive home. Example: a market that appreciates 2%, a home valued at $400,000 will see an $8,000 gain in value versus a $4,000 gain in value for a home with a basis of $200,000.
Do the math. Low prices and low interest rates in turn bring lower rates on insurance premiums and lower property taxes. When those variables are combined, you have two possible outcomes – either a lower total monthly mortgage payment, or more buying power.
So let’s say that in your location, home prices have declined an average of 25% over the past several years. Back then your house would have been worth $400,000. Let’s use a factor of 7.5% just for example’s sake for commissions plus other costs of selling. And on the purchase side, we’ll use a 2% factor for closing costs.
Your Current Home Then Your Home Value Now
$400,000 $300,000
-30,000 less costs to sell -22,500 less costs to sell
370,000 net proceeds 277,500 net proceeds
Your Move-Up Home Then Your Move-Up Home Now
$800000 $600,000
16,000 closing costs 12,000 closing costs
816,000 total cost then 612,000total costs now
The two columns below really illustrate the power of the spread. This is the difference between what the cost of selling and purchasing was at the market peak, compared to what it could be now. The spread really works in your favor in this type of market.
Your Net Then Your Net Now
$816,000 move-up sales price then $612,000 move-up sales price now
370,000 cash from sale of home 277,500 cash from sale of home
446000 net cost of move-up home then 344,500 net cost of move-up home now
THE SPREAD
$446,000 net cost of move-up home then
344,500 net cost of move-up home now
101,500 less today
That larger house cost you $101,500 less today than it would have before. Not only that, but the cost of owning that home is less over time, considering you can lock in a 30-year fixed rate loan at exceptionally low rates and count on that payment staying at an affordable level. And an added bonus? You’re paying property taxes bases on that lower rate. So if you’re toying with the idea of a larger home, maybe it’s time to run the numbers. Arming yourself with what-if scenarios can help you map out your future, and lay a plan out for success.
Working with a professional Realtor in Rochester MN is the one of the most beneficial steps you can take on your journey towards finding a new home, or selling your old home. A local Realtor can also help you search the Rochester MN MLS.
If you would like to explore the possibilities of purchasing Rochester MN real estate, contact us at (507) 421-6845 or email us at info@soldbyjaredjacobs.com today!

This 4 bedroom 3 bath home backs up to a large park and is a must see at $199,900! Home features large deck, gas fireplace, spacious floor plan and much more.

Open House this Saturday (7/24) from 10am – 11:30!
Rochester MN MLS #4016974
Check out www.soldbyjaredjacobs.com “featured listings” for pictures of this great property!

Rochester had 1,250 active listings at the end of June. 241 properties sold in June. 180 new listings were added in June. Average days on market for a sold property was 97 days in June. The absorption rate is sitting at roughly 8.67 months worth of inventory.

This data was taken from our local MLS.

Fantastic investment opportunity with this fully occupied 6 plex located near Mayo Clinic and St Mary’s in beautiful downtown Rochester MN! Please contact Jared Jacobs, CRS with Counselor Realty of Rochester at (507) 421-6845 for more details and your tour today!

New home on the market in Plainview, MN.

Garage lovers dream! One car attached with large workshop and large 3 car detached with loads of storage space. Home features 4 bedrooms on main level, large kitchen, den/office on both upper and lower level, gas fireplace, deck, fenced yard with attractive landscaping and much more! Home priced to move at $159,900.

Selling your home can be a challenge, especially if you are going to really miss your home, or have been there for a long time. Add to this the fact that you’ll more than likely not get what you would have only a couple years ago.

I was in this position only a few months back when I was selling a condo I’d owned for several years. I absolutely loved everything about this property, however life was taking me in a different direction so it was time to sell and move on.

I set my price based on what comparable properties were selling for two years ago as there weren’t many sales in the complex in the last year and a half. I was confident I’d have action as the tax credit was in full swing and I knew “First Time Home Buyers” were out in force!

Over the first two months I had a few showings and a few people through open houses but no offers. The tax credit was starting to wind down when I finally received a call from a fellow REALTOR with an offer! I excitedly scanned the purchase agreement and, I admit, was a bit disappointed at the offer price. I decided to sleep on it and make my decision in the morning.

As a REALTOR I’ve seen numerous sellers in this same position but this was the first time I was there myself. The shoe was on the other foot and it was a reality check to say the least. Several thoughts went through my head: Would I get another offer? Did I really want to rent out my property instead of selling it? If I did get another offer would it realistically be better?

I decided to take out all emotion out of the decision and think realistically through the process. Given the facts I had to work with I decided to counter the offer. The buyer countered back at a price I was willing to accept. We closed on the sale roughly a month ago.

I knew the buyer was concerned with the property appraising for the purchase price if they would have gone higher. I looked at recent comparables and, after swallowing hard, I guess I had to agree. This along with the fact that finding financing for these condos was only getting tougher made my decision easy when I looked at it from the buyers perspective! In hindsight I’m glad I made the decision I did.

Many sellers have a hard time looking at their home from an unbiased perspective – and you may too, since you have built many memories while living there.

So, are YOU looking at your home simply as the seller, or as a prospective buyer??

Traditional sellers in the Rochester Minnesota real estate market are certainly not finding this the most joyous time to be marketing a home. With the market inundated with foreclosures and short-sales, distress is often felt by sellers not in the same financial crisis as some homeowners, who are either trying to weather dramatically increased mortgage payments, while finding themselves owing more on their mortgage than the house is now worth. Still others face the foreclosure specter.

Buyers are bottom fishing for homes with the full knowledge there is blood in the streets stimulated by the number of home foreclosures. And these Buyers are fishing for the lowest possible prices, further driving down price. Therefore Sellers NOT living under threat of foreclosure, still need to compete with properties, which are.

There are a number of things a “traditional” Seller can do to successfully market their property, and remain competitive. (1) Price the home appropriate to where the market is currently with good comparative sales data in your area. (2) Because many foreclosed homes aren’t in good repair, make certain your home is in tip-top shape. (3) Most bank-owned properties (foreclosures) are being sold “as-is”. Offer your home with a home warranty and preinspection. (4) Make certain your home shows perfectly and appears inviting. Most bank-owned properties are vacant and cold appearing.

Overpricing your home in the current market will cause it to sit idly unsold, and possibly delay any move you anticipate making, indefinitely.

However, slightly under-pricing a home can bolster attention and buyer activity, improving chances to sell more quickly.

As in all housing markets, price and condition are paramount!

The seller that can weather the storm on the selling side can find some great deals as they make the move and purchase upward!

More than ever before, acquiring an experienced Real Estate professional, will pay dividends in assisting you in getting your home SOLD. I look forward to hearing from you!

Working with a professional Realtor in Rochester MN is the one of the most beneficial steps you can take on your journey towards finding a new home, or selling your old home. A local Realtor can also help you search the Rochester MN MLS.

If you would like to explore the possibilities of purchasing Rochester MN real estate, contact us at (507) 421-6845 or email us at info@soldbyjaredjacobs.com today!

1. Ask lots of questions of your lender.
The home buying process really starts with the pocket book. Not only do you need to know how much you can afford to buy now, but you need to look at what the closing costs are, as well as what the long term cost of the loan is. Most lending programs available today that include some sort of special deal are geared towards 1st time buyers. Tap in.

2. Do your studying before you do your shopping.
Analysis by paralysis. Study long, study wrong. This is the deal: It is wise to do your studying before you do your shopping. Once you ask a seller to neglect their dinner for you to walk in and “think about it” you should be beyond the “thinking about it” stage. Be ready to make a decision at that point. Don’t think about it — you already did that last week.

3. Find the right agent who’s willing to help you through the home buying process.
Agents are a dime a dozen. How do you know you have a good buyer’s agent? My opinion is they give you some basics. They explain buyer rep to you because they have it memorized and it’s important. They commit to you and ask you to respectfully commit to them. They listen to what you want and need, nail down your budget and set realistic expectations. They answer your phone calls and emails with tact and speed. They get to work finding you what you want. You work together like a hand in a glove.

4. Make your offer look appealing to a seller.
In a buyer’s market with a lot of media hype, it can be challenging for buyers to make offers that will get them what they want. They think no matter what the list price is, hey, it’s a buyer’s market, so low ball. This is not true. Even in a buyer’s market, there is a pretty firm value the market places on each property. The value is set by willing buyers, willing sellers. What you are low balling today is what someone else is fighting for saying this is the one. So, know that you, as the buyer, are not the only factor here.

5. Think about resale before you buy! The average first-time buyer only stays in a home for roughly four years.
This is where the pro steps in. You may not have any idea what contributes to resale — all you know as a first timer is what you want. The pro really brings you a lot of value here when they tell you what you will be up against in the future when you try to sell. There is value assessed to every good and bad feature of the property. Appraisers and realtors understand what specifics give what value to what, so when they start talking resale, your ears should perk up. It’s important.

Per local MLS data here are some statistics for the Rochester MN Real Estate market for May 2010.

195 listings sold in the month of May.
182 new listings were taken in May.
There were 1,239 active listings at the end of May.
We’ve currently got 8.67 months worth of inventory based on current average days on market and active listings.
New median list price is just over $181k while active median list price is just under $175k.
Sold median sale price is just over $149k while sold median list price is just under $150k.

There were a total of 1,187 listings active at the end of March. There were a total of 409 new listings added in March. There were a total of 98 properties sold in March.

We were sitting with just under 8.4 months worth of inventory at the end of March.

Active median list price was just under $170k in March. New median list price was $167.5k. Sold median list price was just over $142k while sold median sale price was just under $139k.

Working with a professional Realtor in Rochester MN is the one of the most beneficial steps you can take on your journey towards finding a new home, or selling your old home. A local Realtor can also help you search the Rochester MN MLS.

If you would like to explore the possibilities of purchasing Rochester MN real estate, contact us at (507) 421-6845 or email us at info@soldbyjaredjacobs.com today!