John Kelly
(651) 238-5649

  How Much Will a Typical Buyer Save?

I have 22 years experience helping my buyers negotiate favorable terms for themselves when they purchase real estate.  In addition to helping them negotiate with the seller, I help them secure attractive loan terms, and I help them avoid paying to much for closing fees and other title expenses.  Just by doing these things, I save my buyers a lot of money.  But a lot of local real estate agents work hard to do the same things for their buyers.  What really sets my program apart from my competition are the additional savings itemized below.

I don't think you will find a more generous program anywhere else.  If you do please let me know--I want to know about it!

Buying a $250,000 Home
 Cash Rebate (1% of sale price):  $2,500
 Free Home Inspection:
 Free HMS Home Warranty:
 Free Appraisal:
 Free Credit Report:
 John Pays your Admin Fee:
 Total Savings:

Buying a $500,000 Home 
 Cash Rebate (1% of sale price):  $5,000
 Free Home Inspection:  $425
 Free HMS Home Warranty:
 Free Appraisal:
 Free Credit Report: 
 John Pays your Admin Fee:
 Total Savings:     

You will save thousands of dollars by purchasing your next home with me.  If you are selling a home, you will save even more!

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 Can You Really Search the Twin Cities MLS?

The short answer is: Well, kind of. The multiple listing service is compiled by our association of Realtors, and only Realtors can log in and directly search the MLS. But because of broker reciprocity, and idx technology, real estate websites are able to repackage the information in the MLS and show consumers almost the entire inventory of Twin Cities homes for sale.

The reason consumers can only see most of the inventory, is because to make their listings available to the public, listing brokers must agree to participate in broker reciprocity. This means that when I enter a listing into the MLS, I need to decide if I want to let my competitors display my listing on their websites. I always let them, because it's really a win-win situation. My seller gets more exposure, the other companies have an opportunity to attract buyers, and if one of them finds a buyer for my listing then it helps me too!! The benefit to buyers is obvious, they can go to just about any real estate website and search for active twin cities listings.

The reason some brokers don't participate in broker reciprocity, is because they don't want other companies to benefit from their listings. I feel they are missing out on an opportunity to help themselves and everybody else, but it is their choice to make.

I have been a St. Paul area real estate agent for over 20 years. So, some of this is hard for me to get used to. It used to be that only Realtors could search the MLS data base of active listings. My buyers had to rely on me to find out about available homes. These days, everybody with an internet connection has some idea of what's for sale, and what the list price is.

I think it's great that more information is being made readily available to consumers. But it can also be dangerous. There is something about sitting in front of a computer, with the ability to search through thousands of homes for sale that leads buyers to believe they have all the information they need. In fact they are missing a lot of critical information that they can only get from an agent who has direct access to the MLS. The biggest mistakes are made by people who don't know what they don't know. And it is no secret that a lot of buyers paid too much for homes over the last few years. Here's how it can happen. Let's assume a family is looking for a 3 bedroom 2 bath single family home in Rosemount. They have been carefully looking online for several months, and they found one they like priced at $215,900. Here's what they don't know: They don't know how long it has been for sale, or how much the owner paid for it 3 years ago. They don't know that the almost identical home across the street sold last year, or how much it sold for, or if the owner paid the buyer's closing costs. They don't know what the average sale price is for the neighborhood, or if there are other similar homes that have been taken off the market after failing to find buyers. And it's possible that there is a nicer one listed with a company that doesn't participate in broker reciprocity.

Information about similar properties that are sold, pending, expired, or cancelled is critical in determining the value of any property. This important information is available to Realtors through the MLS, but it is not passed on to consumers through real estate websites. I believe that a lot of the problems we are having in the St. Paul real estate market can be traced to poorly educated buyers. For the last several years, I watched buyers purchase homes for prices that really couldn't be supported if you looked at all of the data. Psychologists tell us that if you inundate people with tons of information, they will assume that they have all of the information they need. Too many buyers have been making their decisions after only looking at active listings. If they had been aware that they were buying homes that were literally surrounded by homes that had recently sold for much less, or failed to sell at all, they would have made different decisions.

Going to a real estate website and seeing what is actively for sale in the Minneapolis-St. Paul area is a good place to begin looking for a home. But before you get too serious, you want to find an experienced real estate agent to represent your interests as a buyer broker. Your agent will have access to all of the active listings, but you already have most of that anyway. Your agent should be providing you with all of the other information that will help you establish value, so you are prepared to make an informed decision.

 Buying a Home in a Buyer's Market
Of course everybody has heard that this is a buyer's market.  But not everybody knows what that means, or what's unprecedented about today's real estate market.  Historically, a buyers market has simply meant a market where there were too many sellers and too few buyers.  One way to quantify this is to say that a buyers market is when the current inventory of homes equals more than the number of homes expected to sell in the next 5 months.  We have that situation now in most of the Twin Cities metro area, but I remember having too many sellers and too few buyers back in the 80's.  This market is different.  In fact I would suggest that this real estate market is unique in having low interest rates, and attractive financing options, and at the same time still having a shortage of buyers.

In previous markets, I remember that low interest rates were a mixed blessing for buyers.  Every time interest rates went down, home prices went up and homes sold faster.  It seemed that lower interest rates benefited sellers more than they benefited buyers.  As I recall, my sellers spent more time hoping interest rates would fall than my buyers did.  I remember when interest rates finally fell below 10%, sellers and home builders were thrilled-they knew that it would benefit them.

In today's market, with rates hovering around to 5%, it's hard for me to get too excited when they move up or down by a fraction of a percent.  I remember doing deals at 12%, so anything close to 5% sounds pretty good.  Considering that mortgage interest is tax deductible for most people, and that homes are priced substantially lower than just a few years ago,I think this is a great time to be a home buyer.  People with dinged up credit might argue with me about that, and it is true that many of their options have dried up.  So it would probably be more accurate to say that for buyers with solid credit, this market has everything they could hope for: great financing options, motivated sellers, and an abundant inventory of homes in the Twin Cities to choose from.

I believe that the confluence of lower home prices and low interest rates is a unique occurrence.  It is at least unique to me in my 20 years as a Saint Paul area real estate agent.  In all endeavors, unique situations lead to unique opportunities--but only for people who are informed and ready to act.  There are several things buyers can do to take advantage of the current real estate market in the Twin Cities.  If you can't do all of them, do as many as you can.

Get Pre-approved for a Mortgage:

I know everybody has already told you to do this.  Just about every mortgage lender has a website discussing how important this is.  But after I reiterate all of the important and true things that they are going to tell you, I want to share with you a couple of things they probably aren't going to tell you.  Meeting with a banker, getting a good faith estimate, and getting pre-approved will help you know where you stand.  You'll have an idea what your monthly payment will be, and what your closing costs will be.  Of equal importance, you will be in a stronger position when you begin negotiating with your seller.  Sellers love to know that the financing has already been approved by a reputable lender.  They are more likely to consider less than full price offers when they can be assured that everything is going to go smoothly, on time, and with no surprises.

Now here is where your mortgage loan officer might not tell you everything, or where different loan officers might tell you different things.  The established Twin City lenders are going to tell you how important it is to work with a reputable, local bank.  This part is true.  Your sellers will be more impressed with a pre-approval letter from a local bank than they will with one from an out of state bank that you found on the internet.  Also, their agent will remind them that the underwriting, loan package, and other closing documents should be taken care of locally; there are fewer last minute surprises that way.  But a short internet search will find that there are many lenders claiming to have lower interest rates, or lower fees.  So which side should you listen to?  Both sides!!  It isn't just sellers and Realtors who are facing slow times right now.  Mortgage bankers are finding that they need to be more competitive too.  There is absolutely nothing wrong with shopping rates and terms.  The internet is a great place to shop interest rates, but it is a bad place to choose a lender.  Take the rate and terms you find on the internet, and see if a local, reputable lender can match them.  If they can, that's great.  If no local lender can match what you find on the internet, then that should tell you something too.  Some things really are too good to be true.  Use a local lender, but don't hesitate to negotiate the best terms you can get from them.  Even if they can't match something you found on the internet, just letting them know that you're shopping will ensure that you are getting their best rate and best terms.

Be Flexible:

I'm not saying you should buy a home you don't like, or live somewhere you don't want to live.  I'm just suggesting that if your goal is to get the best deal possible, you want to keep your options open.  Especially for first time buyers, part of your search criteria should be to find a home that is a great value.  The more doors you leave open for yourself, the more likely you are to find a great value.

When I mention being flexible, most buyers assume I'm only talking about the features and location of the home.  But being flexible in terms of time will also help you take advantage of today's market conditions.  If you absolutely need to close on a home next Thursday, you need to understand that you just limited your options.  On the other hand if you can be flexible with time it will help you in two important ways.  First of all you'll have more homes to choose from.  Secondly, you can use time to your advantage when negotiating with a seller.  By offering to close when they want to close, you just made the other terms of your offer more acceptable to your seller. Right now there are many foreclosed homes for sale.  Banks appreciate non-contingent offers with quick closing dates.  On the other hand, traditional sellers have varied needs as far as closing dates.  Find out when they want to close.  If you can accommodate their closing date, then you're in a better position to ask for what you want.

Learn to Think Like a Seller Part One:

If you can understand what sellers want, you are in a better position to negotiate with them.  Give them a pre-approval letter.  Close when they want to if you can.  This will help you get the price and terms you want.

Learn to Think Like a Seller Part Two:

This part is much more important than part one, because in my experience most buyers understand part one.  You need to think like a seller, because someday you're going to be one!!  In this uncertain economy that day is coming sooner than expected for many home owners.  You don't want to own anything that you couldn't sell if you had to.

Almost all buyers understand the importance of knowing what's for sale and at what price.  It's true they do need this information.  And this information is easily accessible on most St. Paul area real estate websites, including this one.  The problem is that having all of this data readily available gives buyers a false sense of security.  It can be a powerful feeling to sit at a computer and instantly see all of the active listings in your price range.  Buyers think they are searching the entire MLS, and that they have all of the information they need.  Nothing could be further from the truth.  The most important information on the MLS is not available online to consumers. A smart seller would never make the mistake of using only active listings to decide what their home is worth.  But buyers make this mistake all the time.

When determining the value of a home, there are a several pieces of information that must be considered, and almost none of them are available without the help of a professional real estate agent.  The most important piece of information is accurate data showing what similar homes in the same neighborhood have recently sold for.  MLS data will show how long the homes took to sell, their list price, sale price, and how much the seller contributed to the buyer's closing costs.  A look at "pending" listings is next in order of importance. "Pending" means there is a signed purchase agreement, and that a closing has been scheduled.  You won't know what the actual sale price is until it closes, but a search of pending listings is critically important, because it shows what is happening right now.  And the ratio of pending listings to active listings gives you an idea of how many buyers you're competing against.  I'd also want to look at expired and cancelled listings.  If there are a lot of similar homes that are failing to sell at all, you want to know about it.  As far as establishing value, homes are definitely worth less than the list price of similar homes that failed to sell.  The expired and cancelled listings at least show you what you don't want to pay for a home.  And if there are too many expired and cancelled listings surrounding the home you are interested in, you might want to consider another location entirely.

Before taking a listing, all competent real estate professionals go over all of this information with their sellers.  It's really impossible to establish value without a detailed analysis of sold, pending, expired, and cancelled listings.  Of course agents and sellers consider active listings when they determine value, but the smart ones understand that active listings are only one piece of the puzzle.

So what does it mean to think like a seller?  Educated sellers list their homes with somebody they trust to represent their interests.   They have their agent prepare a detailed market analysis that considers sold, pending, expired, and cancelled listings as well as active listings.  I see too many buyers do just the opposite.  Many of them don't even retain a  buyer broker to represent their interests.  And even buyers who do have their own agent representing them generally don't demand the same level of accountability from their agents that sellers expect. For the last several years, I watched too many people buy homes that they never would have purchased if they had seen all of the data that sellers typically are given.  I can only assume that the buyers didn't know what to ask for and that their agents found it easier (and more profitable) not to give it to them.

Write non-contingent offers:

I mean non-contingent on the sale of a home you already own.  If you're interested in  purchasing a foreclosed home,you should know that banks generally won't even read contingent offers.  In fact all sellers prefer to look at non-contingent offers.  When you write a contingent offer, what you're really saying is "maybe I'm going to buy your home."  The word maybe is a real downer for sellers.  They understand how tough this market is, and now you're asking them to trust that you'll get your home sold.  And you can't even promise when you're going to close, because that depends on what you can negotiate with a buyer you haven't even found yet.  Even if you do get a seller to accept a contingent offer, the chances are that you could have negotiated a lower price if you had presented them with a non-contingent offer.  And the seller is going to keep marketing their home looking for a non-contingent buyer.  So now you're in a position where you have to sell your home fast--before somebody comes along and buys the one you want. Being forced to sell fast is no way to get top dollar for your home.  So by writing a contingent offer, you'll probably pay too much for the one you're buying, and get too little for the one your selling.

Writing a non contingent offer is easier for some buyers than it is for others.  First time buyers are in the best negotiating position right now because it's easy for them to write non-contingent offers, and they generally can be flexible with time which will work to their advantage.  But if you already own a home you have some advantages of your own, especially if you are moving up to a more expensive home.  Emotionally it is difficult to sell your home for less than you could have very recently.  But I always ask move up clients how it would help them to wait for prices to come back up.  If they get 10% more on the one they're selling and then pay 10% more on a more expensive home they have actually lost money by waiting for a "better" market.

This market is hard on sellers emotionally as well as financially.  But when they think with their heads and not their hearts, they realize that this is a great time to move up to a bigger home.  So their only question is do they get their home sold, and put themselves in a position to be a non-contingent buyer, or do they go looking for homes and write a contingent offer?  The only reason I would ever write a contingent offer is if my needs for my next home were so specific that I was afraid I might sell my own home and then not find anything I wanted to buy.  This just isn't happening right now to very many people.  There are too many homes for sale in almost every price range.

If you own a home, you need to decide whether to sell first and then buy, or write a contingent offer.  Here's how you decide.  Become educated on what's available in your price range.  Chances are there are lots of sellers who would welcome non-contingent offers.  In this case the decision is easy:  Get your home sold, and now you're in position to negotiate a good deal on your next home.  On the other hand, if there is only one home that you're interested in, you may need to consider writing a contingent offer.

Search for Value:

Too often buyers ask me how much sellers typically are willing to "come down."  I always tell them that they are asking the wrong question.  Many of the best values sell for close to full price.  And many of the sellers that are willing to accept low offers are still not offering a great value.  As we discussed, you need to know what similar homes are actually selling for--then you're in a position to recognize a good value when you see it.

Have the Sellers Pay Your Closing Costs:

Typically your closing costs are going to be around 3% of your mortgage amount.  Almost all lenders will allow you to have the sellers pay the closing costs.  And a good buyer broker should be happy to help you negotiate this point with your sellers.

Negotiate, Negotiate, And Negotiate:

Times are hard for sellers right now.  Buyers know this.  The smart buyers are taking advantage of this market, and negotiating strongly with sellers.  Be sure to negotiate on price and closing costs.  Also, your purchase agreement should be contingent on an inspection.  If the inspection finds significant problems, you should negotiate again to get the seller to help fix the problem.  Sellers want to hold onto buyers once they find one.  The inspection addendum allows you to cancel the agreement if you're not satisfied with the results of the inspection, so you are in a strong position to negotiate.

Wow, negotiate with the sellers.  That's really innovative advice!!  Well this market has been slow for everybody in the business.  Everybody is hungry, and everybody has to be more competitive.  You should be negotiating with lots of people.  Negotiate with the bank to get the best rate and terms.  They won't be offended--they want your business.  Use a title company that offers competitive rates for title insurance and closing fees.  You can save a few hundred dollars here.  Some of the more expensive title companies will also match rates if you show them a quote from another company.

There is one more place to negotiate.  Negotiate directly with your real estate agent!!  I represent Minnesota's Largest Discount Broker.  So I always have sellers asking me about our low commissions.  Buyers almost never ask me.  They don't think they're paying me.  They're wrong. Without their participation and money there isn't going to be any money to pay anybody at the closing.  It's just not much of a closing without a buyer.  I can't speak for all agents. But when a buyer asks me to share some of my commission I do it more often than not.

Good luck looking for homes:

This is a great time to be a buyer!!  Take advantage of the situation you are in.  If you have any questions please don't hesitate to contact me.

 Buying Foreclosed Homes

I get a fairly steady stream of buyers wanting to purchase foreclosed properties in St. Paul and other communities in the Twin Cities. Of course what they really want to do is buy a property at a reduced price. Foreclosed properties are listed in the Twin Cities MLS along with everything else that is for sale. So I usually try to convince my buyers to look for properties that offer the best value, and to consider all properties.

In addition to bank owned properties that are already in foreclosure, there are other properties that are in pre-foreclosure, and today's St. Paul area real estate market has plenty of other motivated sellers who are willing to unload their properties at attractive prices. I know from experience that foreclosed properties have issues that some of my buyers are not going to want to deal with, so I try hard to get them to keep all of their options open.

After I convince my buyers to consider all properties, it is still very likely that some of the lowest priced real estate will be in foreclosure. So I have to prepare my buyers for the fact that buying bank owned property is very different than buying other property. It is true that banks are very motivated to sell, but they often don't act the way other motivated sellers act. To begin with, motivated sellers typically respond quickly to written offers--banks typically do not. It is not uncommon to submit an offer and then have to wait a week or more to hear anything at all. It is important to prepare buyers for this fact, because some buyers are not in a position to wait that long. I have several investors who are willing to submit offers and then wait on the banks response. But most of my buyers who are looking for a house to live in have a pretty short window of time to work with. They know when they need to take possession of their new home. So when they submit an offer, they want to hear something pretty quick. When they don't, they're likely to go deal with a seller who will respond to them on a timely basis. It's really sad that the banks are doing such a poor job responding to offers. They are missing out on many buyers who would probably be willing to pay more than an investor would.

The time delay is really because banks are not set up to be in the business of acquiring and selling real estate. Banks, especially out of state banks, have never been good at managing residential real estate. And in this market they are overwhelmed with the number of properties they have, and they are getting more all the time. This means that there are going to be some good deals for savvy buyers. But because the banks are so unprepared to deal with this number of foreclosures, they are going to be exceptionally difficult to deal with. Buyers need to find a professional buyer broker to represent their interests as they negotiate the process of buying a foreclosed home in the St. Paul area.

In addition to the slow response time, bank owned properties create many other challenges for buyers. I have always counseled my buyers to write offers that are contingent on a  professional home inspection. This is important even with properties that appear to be in good shape. Knowing as much as possible about what you're buying is even more important when considering foreclosed properties. The problem is that some banks won't look at offers that are contingent on anything other than financing. Even banks that will consider offers that are contingent on an inspection prefer the certainty of offers that do not include an inspection contingency.  In a multiple offer situation, I have several investors who write offers that are not contingent on inspections.  These investors know that some of the other offers are likely to be from buyers who are willing to purchase the home without an inspection, and they are concerned that adding an inspection addendum might make their offer less attractive to the bank.

The inspection contingency is only one of the common contingencies that are used in Minnesota real estate contracts. What all of the other contingencies have in common, is that the banks won't look at any of them. I have a buyer who has absolutely fallen in love with a home that is in foreclosure. But she has a home she would have to sell. She would be thrilled to write a full price offer contingent on the sale of her home, but the bank won't even look at a contingent offer. I usually try to have my clients get their homes sold, and then they are in a position to write non contingent offers. Of course everybody prefers non contingent offers. But my client is reluctant to accept an offer on her home, and then submit an offer on the foreclosed home, knowing that she's unlikely to hear anything for 2 or 3 weeks. The banks are making it really difficult for move up buyers to buy foreclosed homes. They won't accept contingent offers, but they won't respond quickly to people who sell their homes and write non contingent offers.

From a legal standpoint, the biggest problem with buying foreclosed properties is that some of the out of state banks are acting like they don't have to follow Minnesota's real estate laws. We have pretty strict laws on disclosure, but many banks are simply refusing to comply with the law and provide disclosure statements. Also, Minneapolis, St. Paul, and many of our suburbs have truth in housing laws requiring written inspections to be available when buyers look at properties. I can't count the number of foreclosed properties I have visited that are not in compliance.

Minneapolis and St. Paul are taking strict measures to make sure that foreclosed homes are properly taken care of. From a buyer's perspective the most problematic measure involves placing work orders, and code compliance orders on vacant homes. Yesterday I was looking at a property in St. Paul with one of my best investors. He is somebody who takes pride in fixing up properties the right way. His motto is that he doesn't want to rent out anything he wouldn't live in himself. This particular property has a lot going for it, but the work orders require things to be done that I would never need to have done before living in the home myself. It was really the work orders that kept my client from purchasing the property. This is an investor who does most of the work himself. I kept thinking that if he couldn't buy the property, satisfy the work orders, and still make the numbers work then nobody is going to be able to. Both cities are considering plans to make it more difficult and expensive for investors to buy foreclosed homes and then rent them out. Remember the banks are making it inconvenient for individuals to sell their own homes and buy foreclosed homes. Now we have the cities making it hard for investors. Who is going to buy all of these homes?

There is something worse than missing an opportunity to buy a property because the city is requiring excessive work orders. A number of people have purchased properties in Minneapolis and St. Paul only to find out about the required work orders after they take possession. Remember the banks aren't always disclosing things the way they are supposed to. So now they own a property that they are not allowed to rent, and they can only sell it to somebody who is willing to assume the burden of the work orders.

I hope I haven't made the idea of buying foreclosed properties sound too frightening. It is working very well for a number of my clients, and there are a lot of good deals available. In fact some of the difficulties I have discussed help ensure that there will not be enough buyers for all of the foreclosed properties and that there will continue to be good deals for buyers. If you are interested in buying foreclosed properties, please get an experienced buyer broker on your team.

Buyer Representation

Minnesota law requires that early in any relationship, real estate agents must discuss with consumers what type of agency relationship they are offering. This is especially important (and confusing) in Minnesota, because there are 5 different types of agency relationships that consumers might choose to have with a real estate broker. It used to be very simple: Because the seller generally pays the real estate commission, all agents and brokers involved in the transaction represented the seller. Some states still operate that way; the idea is that you should represent the party that is paying you. But this created problems for buyers. There were 2 agents involved in most transactions. One agent listed the property and another agent showed the property to their buyers, wrote up the purchase agreement, and helped the buyers arrange financing etc. So buyers had good reasons to believe that the person who spent so much time with them and did all of these things for them must be representing them. After all, their  agent had probably never even met the seller until the offer was presented. Surveys showed that most buyers believed (incorrectly) that their agent was supposed to be representing their best interests.

I believe that what we are doing today in Minnesota is better. But it is more complicated to explain up front. From a buyer's point of view, the most important thing I can stress is that you should find an agent who will represent only your interests. This means you should find somebody you trust, and enter into a contract for buyer representation. Before signing the agreement for representation, your agent should show you (and have you sign) the "Agency Relationships in Real Estate Transactions" disclosure. They should carefully explain all of the details about agency relationships, many of which I am glossing over here.

I'm leaving out many details, because I want to highlight the two things I consider to be most important from a buyer's perspective: Find somebody to represent your interests, and understand that the listing broker is representing the seller's interests and not yours. When you walk into an open house, the agent who greets you is almost certainly representing the seller. The agent should disclose this very early in any conversation with you. But really, as an informed buyer, you should already know it. You will begin to notice that many agents don't disclose their agency relationship immediately, especially at open houses. I don't think they are trying to be deceptive. It's just that a discussion about agency law is not a real ice breaker when you are meeting somebody for the first time. Even if a discussion about agency relationships isn't the first thing the agent discusses, it has to come up before there is any opportunity for you to divulge any information that you wouldn't want to share with the seller.

22 years ago, I was one of the first St. Paul area real estate agents to offer buyer representation. At the time, many people thought it was unusual. Of course now it is standard operating procedure for most Twin Cities real estate agencies. In addition to carefully representing buyer's interests as an experienced buyer broker, I also help them negotiate favorable mortgage terms, and arrange for home inspections.  If you have any questions, please don't hesitate to contact me. I will be delighted to hear from you.

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 Buying a Home Contingent on Inspection

Buying your home is probably the single biggest investment you will ever make. To help protect your investment, I will help you write your purchase agreement so that it is contingent on an inspection. I think that this is so important that I will pay for it myself!!

Making your offer contingent on an inspection allows you to avoid unpleasant surprises upon taking possession of the home. Your Twin Cities home inspector's report will cover the condition of the home's heating system; central air conditioning system, plumbing and electrical systems; the roof, attic, and insulation; walls, ceilings, floors, windows and doors; the foundation, basement, and other structural components.

Even if the inspector finds nothing wrong with the home, you will have peace of mind, and you will receive a wealth of information about your home and how to maintain it. If the report shows any problems, you will be happy that you have three options you can exercise at your discretion. If you feel that the problems are so large that you no longer want to purchase the home, it's that simple: You don't have to buy the home. I carefully write the inspection contingency so that you can cancel the purchase agreement and have your earnest money returned.

If you feel the problems are manageable, and are about what you expected considering the age and price of the home, you can continue with the purchase. A third option involves negotiating to have the seller remedy any problems. If you can't come to a satisfactory agreement with the seller, you always have the option of canceling the agreement and having your earnest money returned to you.

I have been selling real estate in the Twin Cities for over 20 years, and I have convinced almost every one of my buyers on the importance of writing their offer contingent on an inspection. Most Twin Cities home inspectors spend two or three hours performing the inspection, and then another hour or two going over the results with the buyer. After meeting with the inspector, buyers are almost unanimous in their belief that having the inspection is a vital part of the home buying process. When the inspector finds hidden defects, the buyers are relieved to find out about it while they still have some options. Even when there are no major flaws to find, the buyers find the meeting very informative and educational. Even buyers who are very experienced at working on homes find it helpful to meet with a qualified Twin Cities home inspector whose only business is providing impartial property inspections.

The cost of a home inspection varies geographically. In the Twin Cities a single family home inspection typically costs about $400. They can cost more depending upon the size of the home, the number of bathrooms, and the need for additional inspections such as septic, well, radon, or mold testing. Please do not let the cost of an inspection cause you to miss out on having your home inspected. It is a small price to pay for the sense of security and the knowledge gained from the inspection. Find a way to keep the price of the inspection in your budget. Or better yet, use me when you buy your next Twin Cities home and I will pay for it!!

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