Whether you are buying your first home or upgrading to a bigger house, navigating the market in Minneapolis can be very challenging these days. With home prices on the rise and a depleted inventory, it is very likely that the house you’re hoping to buy will be have multiple offers. PRG’s staff are knowledgeable and experienced in helping homebuyers through the process. Before diving in, a good first step is to meet one on one with our Homeownership Services staff who provide free education and advising support.
Project Manager in Real Estate Development, Kevin Gulden, and our Real Estate and Development Coordinator, Erin Wilson shared their tips on finding a home in a competitive market.
Data indicates a steady decrease in inventory, and an increase in price of homes in Minneapolis. Graphs from the Minneapolis Association of Realtors.
Find a trusted, knowledgeable realtor
A lot of people are buying homes right now, so there’s a chance someone you know has recently gone through the process. Ask a close friend who has bought a home for a referral. There are a lot of details to think about in finding a home in a fast-paced market that demands quick decisions. Sellers are accepting offers within a few days in the current market. Make sure you have exclusive representation, and don’t rely on a seller’s agent to represent you. You’ll want someone you can rely on and that you trust.
“Your realtor will guide you through the process. You can use their historical knowledge as long as you ask questions. Don’t be afraid to ask a lot of questions,” said Kevin.
Buying the right home for you
With the inventory as low as it is and available homes getting sold every day, it can be tough to find a house that’s just right for you. Stay in frequent communication with your realtor, and when you find homes that you are interested in putting an offer on do additional research. Check recent sales on the block, as this will be an indicator of the present and potential future value. Think about how your potential home fits with the rest of the neighborhood.
Do research online using tools like the City of Minneapolis website. In the Property Information section you can access a lot of historical data such as the Truth in Housing report and inspection permits. This is a great tool if somebody is advertising home improvements like a new roof. You can check to make sure permits were pulled, and it was done by a licensed contractor.
“You want to find a home that at minimum holds its value,” Kevin shared.
Go back and look at a home more than once. If you are going to live there you’ll want to see what the neighborhood is like not just during the workday, but evenings and weekends. You’ll want to be aware of all of the activity, noise, and traffic. Picture yourself living there and consider all the details.
PRG Real Estate and Development Coordinator Kevin Gulden
Prepare your finances
Buying a home will likely be one of the biggest financial decisions of your life. “If you’re shopping for a house and the seller has done a lot of improvements, be prepared for property taxes increasing,” Kevin shared. There are details that can be missed, especially in newer communities with the tax increases that come with new schools and new infrastructure.
Saving at least 3% of the cost of the home is a good goal. There are a lot of fees to consider when preparing to buy a home, and there are many fees that buyers forget. Having a strong savings will help with up-front costs like earnest money, appraisal fees, and a homebuyer inspection, which is another very important expense to save for.
“Get an inspection and don’t wait,” said Real Estate and Development Coordinator Erin Wilson. “A lot of people waive an inspection because it looks good to a seller in multiples,” she added about the various ways buyers reduce contingencies to leverage their offer.
An inspection is an additional expense, but is imperative to schedule one. It also provides a buyer an out if they find a major issue prior to closing. New construction homes may have a warranty to back any necessary repairs, but older homes often have needs that may be missed without an expert’s eye. The American Society of Home Inspectors or ASHI’s website is a great resource for finding certified home inspectors. When you schedule an inspection make sure you plan for around 90 minutes to review the home together. Look for the less obvious like water stains in the basement, check under the stairs, and pay attention to details in the unglamorous parts of the house. Look at the roof and sidewalks, and if snow is covering parts of the house, ask for photos from warmer months. Inspect every corner of your potential new home.
It is an exciting time to be a homeowner. Following these tips will help you through the process. Everyone at PRG is here to help and we wish you good luck on your journey home!