The Minneapolis Real Estate Blog: October 2007

This weeks featured Historic Home is 285 Summit Avenue.

In 1882, a two story Second Empire Home was built on this site by Henry Rice, a local congressman and US Senator. He owned the home until it was purchased by Fredrick Fogg in 1894. In 1899, A. H. Stem was contracted by Mr. Fogg to remodel the existing home, and what emerged was a Colonial Revival with a high-end twist.

The siding on the home seen in this photo taken in 1973 is not original to the home. But thankfully, since then, the owners have removed the aluminum siding and revealed/restored the original wood beneath. The home also has many architectural details worth noting. Doric fluted columns support the porch, with wreath molding details above. The front windows are very interesting as they are slightly curved, with transom windows above three others. The elaborate doorway on the second floor, as well as the main entrance, give the home an upscale feel of a typical Colonial Revival home.

Currently a single family home, the last recorded sale was in 2002 for $1.25 Million. With a little over 8000 square feet, the home has about 7 bedrooms and 5 bathrooms.

The Infamous Minneapolis Corporation - Target

My husband thinks he's funny. Well...okay, he is. But as we all know, funny people can be annoying sometimes. This little annoyance inevitably creeps up when you just don't need it. His always comes around when I mention I am going to Target. He interrupts me, always saying "Please, please, a little respect...it's Targe't (pronounced Tarzhay). Rolling my eyes, I just walk away.

Founded in 1962 as a cheaper version of the Dayton's Department Stores, it has taken decades to achieve the success in the marketplace we see today, namely the $59 Billion in sales for last year. Now called the Target Corporation, the little store has outlasted all the original high-end department stores that founded it - Dayton's and Marshall Field's, to name a few. Growing up in the Midwest, Target was just another store to me, similar to K-Mart. But in 1994, I came back to college, walked into the local Target for supplies, and was shocked to see a completely different brand. They had finally figured IT out and I was happy as can be.

The IT was items that were low cost, but felt high end, and for one word, designed. By the late 1990's, Target was finding itself. They commissioned architect Michael Graves to design 200 items for the stores and it proved to be another hit with customers. In an interview with the Wall Street Journal, CEO Bob Ulrich commented on how amazing it was that Michael was able to take a $135 teapot and produce it for Target at only $35. Soon other designers were beating down the door, as well as Celebrities wanting to endorse the product. (A few of my favorites Target designers are Amy Coe, Mossimo, and Liz Lange.)

Today, Target is even more upscale then it used to be in the 1990's, and is now the fifth largest retailer in the nation. In fact, when affluent people are asked where they shop for supplies, Target is the first store they mention. When you move to Minnesota, you will quickly find that most Targets are now Super Targets. Target has such a monopoly on the Twin Cities market that Super Walmarts are rarely seen. Don't be surprise when you walk in and find a Starbucks Coffee in the new stores. How much more upscale can you get then that?

With the success of Target comes its charitable side. A little know fact is that it is written in the corporate by-laws that 5% of its pre-tax earnings must be given to charity. So far, the Target Corporation has given over $150 Million to schools across the nation. It also donated $1.5 Million to the Red Cross to help Hurricane Katrina victims.

Where ever you decide to shop, know that Target is a staple here in the Twin Cities...they are everywhere. A good thing as far as I am concerned. For the last 13 years, I have been a loyal customer, not only because they are always updating their selections, but because the customer service is pretty good, too. Target would probably be pleased to know that I still use four deep blue bowls that I bought in 1995...they are just beautiful. When people ask me where I got them, I proudly say, "Tarzhay".

As some of you might know, we are building a house here in Minneapolis, which is due for completion in February-March. Our builder just called us today to let us know they have decided to have the Home Warranty go in-house, instead of a third party covering it. The builder wants to know by the end of the week if we want to stay with the outside warranty company, or go in-house. My questions are:

1) What would be the benefit of the builder holding the warranty versus an outside firm?

2) Would it be wrong to put all our eggs in one basket, with the builder, or is it better to have the builder handle all warranties? Does it make the claims process easier if we use the builder?

If any of you that are builders, or work with builders, could shed some light on the pros and cons, my family would greatly appreciate it. Not only is this something we need to understand, buy I need to know for the sake of future clients who decide to build in the future.

Well, after months of back and forth negotiations, the downtown parcel of land that will be the site of the new Minnesota Twins stadium has finally got a price tag. For the small sum of $28.9 Million, Hennepin County will be purchasing the eight acres of valuable real estate so us baseball fans can finally feel like we are at a baseball game. (Of course the "word" purchase is a stretch since the county took the property through condemnation and the price they are paying is the fair value as negotiated by a local judge.)

For years the Twins have played in the Dome, and let me tell you, Domes are no place for baseball games. It is too loud to hold a conversation with the person sitting next to you and baseball should just be played outside. I probably won't be attending a game until the ballpark is complete which is estimated for opening season 2010.

Check out the webcam of the site during construction.

If you ever read or have some one tell you "You don't need an agent to view this home", your best course of action should be to run directly TO your agent.

Today, I received a card on our door by a local lender who was advertising an open house for a home being sold without agent representation. I think it's great that some owners feel they have the ability to sell a home on their own, but I don't always recommend it. In today's case, the lender had the statement above on the card.

Now I know the lender may not have understood how people might read these nine words. Most likely, they meant that the house isn't on lockbox so you don't need an agent with a key to get in. But this is an Open House, so this would seem like common sense.

But others might read it differently. To me it reads, don't bring an agent at all. Or, you don't need an agent to buy this house. My problem with this is that no buyer should walk into a For Sale By Owner without their own representation, and here is why:

1. Confidentiality: The seller is going to engage you in a conversation and seek personal information from you that you might feel is confidential. However most buyers will feel obligated to talk and unfortunately will talk too much. Buyers need to understand that any info they divulge could result in them not getting the best deal, or paying too much for the home. Sellers WILL use what you say against you during negotiations.
   
2. Disclosure: The sellers have chosen to forgo any representation, which means they may not be following the law when it comes to disclosure. They also may have not measured the home correctly and that 2500 square foot home you think you are getting actually includes the garage square footage as well. Having an agent with you will ensure you get the correct information.
   
   
3. No Deal: If you show up at an open house by a FSBO without your agent, the seller could claim that they "found" you on their own and state they are not obligated to pay your agent their rightful commission. This either means you will have to pay your agent the commission out of your own pocket, decide not to purchase the home, or buy the home without representation and take on the risk of going it alone. With the litigation happy world we live in, I highly recommend you have an agent by your side at all times.
   
4. Private Showing : by going to an open house hosted by a seller, buyers will not be allowed to walk the home by themselves. Sellers don't trust you and will follow you room to room, trying to sell the home. The problem with this is that instead of seeing the details of the home and how it can fit your needs, you will be listening to the seller, and most likely be getting annoyed. You will miss important aspects of the home which could have sold you on purchasing it.
   
5. Representation: and lastly, don't let anyone tell you not to bring your agent. It is your right to have someone representing your interests at all times. If a seller insists for you to ditch an agent, ditch that seller. Most likely any transaction pursued with them will result in alot of unneeded headaches.

Please know that I am not against home owners selling by themselves. I have just run into a couple that are dishonest from the start and actually refuse to show a home if a buyer has an agent. In these cases, it is much better if the buyer passes the home by.

I have also met many sellers who are very agent friendly and these transactions have ended with two happy parties. What ever you decide to do, do so with the advice from a real estate agent. They could just save you thousands of dollars during negotiations and save you from a possible lawsuit in the future.

In case you haven't heard, there is a major home auction happening this weekend at the Minneapolis Convention Center. Local lenders are now owners of a mass quantities of Twin Cities homes and need to get rid of them. The solution is to hold one of the largest auctions in recent history, about 325 homes spreading across the region.

The auction is the perfect place to get a good deal on the home. Only problem is that "Buyer Beware" is the phrase of the day, so you will have to do inspections and walk-throughs on your own, before you bid.

If you are looking for a luxury home, then you are in luck. Just out of Stillwater, northeast of the Twin Cities, is an elegant home sitting on 11 acres that could have your name all over it. The home, pictured above, was built in 2003, has over 7000 square feet, and is valued around $1.5 Million. Your starting price...$729,000!

With over 3500 foreclosures in Hennepin County alone this year, and 8000 in the surrounding six counties, banks hope the auction will help them unload these unwanted liabilities. Everything from single family to multi family is available at the event, so make sure to check it out this weekend. I haven't decided if I am going to attend yet, as I am sure it will be a zoo.

With so many lakes in Minnesota it could easily get confusing on the water quality of each lake. Thanks to the Department of Natural Resources, they do the research for you. All you have to do is fumble through the data.

On their website, you can look up the lake of your choice and then obtain information on water quality, water clarity, what types of fish the lake stocks, topography charts, and more. The DNR also offers Fish Consumption Advisories and lets local real estate owners know if certain species have higher than normal amounts of Mercury.

It is a great way to check up on the ecology of a lake you might be thinking of purchasing a home on.

Shopping Day!

Well the one fun thing about building a home is deciding on what you want to put into it. This can quickly become a hair pulling out experience if you let it overwhelm you. Oh, and it can get expensive too!

After you sign all the paperwork and have the negotiating complete, most builders will ask you to set up a meeting, a three hour one, to pick your "colors". Of course, "colors" really means you will be choosing everything from the appliances, paint colors, flooring, cabinets, siding, electrical, faucets, lighting, countertops, etc.Some builders have showrooms where you can see every single product they offer. Most are still behind on this trend and will have you look through photos of the items, or travel to a local vender to view products.

Some things you will have to consider:

1. Cabinets - Oak is usually the baseline for cabinets and automatically "included". Maple comes in second, Cherry third, and exotics next. Upgrading to Maple can be quite expensive, especially in the kitchen. Cherry is really expensive and mostly comes in darker colors. Be careful with how dark you go. If you choose dark, but don't have enough light, the room will appear smaller than it actually is. (HINT: if you want to save some money, put oak cabinets in all the bathrooms and laundry room. These rooms aren't used as much as the kitchen and won't stand out as much)
2. Floors - another cost that can easily escalate is floors. Most options begin with vinyl, then laminate, wood, or carpeting. If you want wood, find out how much the builder is charging you , then get some estimates from local hardware stores. In some cases, it is cheaper for you to put in the floors latter, after closing, as you won't have to pay the extra mark-up from the builder.
3. Paint - builders love to put in flat color paint on the walls. I hate flat as it shows marks really well and is hard to clean. You can ask to have other textures put in, but it will cost you. Most builders will give you a choice from 4-6 neutral colors, and will paint the entire home the same. We saved $1000 by just having the builder paint the home all white, instead of paying for a color.
4. Countertops- there are so many choices available and you will need to ask the builder what type of products they offer. Some offer Corrian, Laminate, Granite, Cambria, Silestone, etc. If you choose a natural stone, it can add thousands of dollars to the home. To save money, only put the expensive countertops in the kitchen and leave the bathrooms with the least expensive stuff. You will also have to coordinate the countertops with the cabinet and floor colors, which is one instance when you could be pulling your hair out.
5. Electrical - this will be the longest part of the selection process and you might want to walk through the model a couple of times to get an idea of where you want switches, dimmers, recessed lights, cable outlets, fixtures, etc to go. You will have to sit down and go room by room with the builders representative. Recessed lighting can add up, as can dimmer switches. Also think about if you want any ceiling fans in rooms as they will need to be wired for future use. Don't forget cable outlets. You may not need them in every bedroom, but a future buyer might not be to happy with having to install them themselves.
6. Lighting - builders usually offer five lighting packages, with different finishes. The typical "cheap" lights are brass/gold finish and I advise, if you can, to pay for the next level up. Don't forget to think about floor outlets for lamps in the living room, or under-cabinet lighting for the kitchen or bathrooms.

Ok, so I have tried to cover the most obvious things you will have to choose during the selection process. If you are using a custom home builder, your options could be limitless, but more expensive. Think about what you would really love to have in the home and then review the final price. If the cost is too high, take out the things you don't really need, or things you can do at a later date yourself. Just take care of the most important, and worry about the small stuff later.

Read about other aspects of building a home including, Choosing the Lot, Picking the Builder, Things to Consider.

Minnesota has always been a state leading the way to better living. Now the state has taken one more step by creating Minnesota GreenStar, a new voluntary program for certifying homes and remodeling projects as "Green".

The green certification for remodelers is the first in the nation and has a goal of encouraging home owners to choose more efficient, environmentally safe, and healthy ways to build their homes. The Green building standards take into account local building codes, energy codes, and seasonal concerns. They are still being developed and tweaked, and according the company will be finalized this month.

According to MN Green Star they are trying to ensure that homes under their certification are:

• Healthier and more comfortable
• More sensitive to the community and the environment
• More efficient with use of energy, water, materials, and land
• Less costly to operate
• More Valuable in the Marketplace

Certification could also lead to other benefits, including:

• Mortgage and home equity rate discounts
• Rebates on building materials and products
• Tax credits
• Preferred utility rates
• Preferred homeowner and health insurance rates

Wouldn't you just love to get some of those savings and benefits?

Visit their website to learn more about green certification in Minnesota and think about making your next project as MN green as you can!