Jennifer Kirby, the Luxury Agent

I know many of you won't believe this, but the dirty little secret that the local media isn't reporting is that homes in the lower price range are flying off the racks. Yep...just like a bridal store having a super cheap sale on gowns with women knocking each other out of the way as they try to snatch up the latest deal, so too are investors and first time home buyers trying their best to win that little cottage home, out doing each other with above list price offers.

Like I said, you don't believe me, do you?

Last month I experienced this phenomenon first hand with a duplex I listed. With-in five days, I had five offers, all above asking price. There must have been some telepathy in the air because almost all of them were around the same price. I actually had to tell them to resubmit their "highest and best" offer. Who ever did the best, gets the house. Let me tell you, it was competitive bidding and I was truly surprised at how high some of the offers got.

Even better, I know an investor couple who are snatching up dilapidated foreclosures and rehabbing them to flip. Not only do they have to bid against other offers each time they find a home, but when it comes time to sell the property, they have to deal with multiple offers from first time home buyers. (They do fantastic rehab work by the way!)

So yes Virginia, there are some segments of the real estate market that are doing quite well. Multiple offers do exist and are getting more common.

It makes is hard to explain to a buyer why they need to offer above listing price if they want to get a home, especially when all they hear about is how cheap homes are. But if you want to purchase a home in decent shape and at a great price, be prepared to pay for it because in this market you'll be just like those brides you see on television...pushing and yelling your way to that perfect find.

I can't tell you the number of times that I have called clients, only to have my phone calls either returned two days later, or sometimes never. I hear plenty of excuses, the most common being "I am too busy". But nothing irks me more than contacting a client regarding an important item, or better yet, a looming deadline, only to hear crickets as my messages go unanswered.

See, real estate is its own beast. Things can fall apart in a hurry if people don't communicate. Sometimes I feel us real estate agents earn our money best by chasing people around for signatures and approvals. Why is it that if a client leaves me a message or email, they expect me to call them back with-in 30 seconds, but for me, some clients feel no need to hurry up and do the same. I believe the door should swing both ways. Oh, but that's just my opinion.

No I am no saint, and have had my moments when I have failed to reply quickly. But I tell all those that know me that I usually respond the same day, if not in 24 hours.

I guess the moral of the story is to pick up the phone, or tippy tap away on the keyboard, and at least acknowledge your agent's existence. If you fail to, please don't ask them why the deal has fallen apart and the other party is walking away, or better yet, why you must follow through with the home purchase or forgeit your deposit.

One of my favorite spots to visit in Minneapolis is Minnehaha Falls. A few weeks ago, I took the camera out on a cloudy day and was able to capture this silky effect of the waterfall.

Recently the Minnesota Association of Realtors has made its members aware of current legislation being proposed by the Minnesota House of Representatives that will greatly affect Minnesota homeowners in a negative way. On Monday, the Tax Committee "released a "delete all amendment" to HF2323 and added provisions that are negative for real estate in the Omnibus Tax Bill. Authored by DFL Representative Ann Lenczewski, it contains a number of tax law modifications that hurt all Minnesota home owners."

We all know that the state of Minnesota, as well as numerous states across the country, are hurting financially. They find themselves with a growing budget, but no way to fund the increased expenses. Instead of finding ways to cut within the government, many politicians choose to look to the tax payer for "relief". The only solution in their eyes is raise taxes or take away tax incentives. Minnesota State spending, for the record, has gone from $14.5 billion in 1992/93 to $34.6 billion in 2008/09 - a 138% increase.

(As an FYI: Governor Pawlenty has proposed a plan focused on reducing spending and raising revenue without raising taxes.)

No big surprise to those of us in real estate, but the house tax bill hurts real estatein the state of Minnesota. The DFL (Democrat) House Tax Plan raises revenue by cutting a number of income tax deductions. Of significant concern to Minnesota REALTORS® and homeowners, the DFL House plan eliminates two major real estate tax deductions: the Mortgage Interest Deduction and Real Estate Property Taxes. The bill also eliminates provisions of the Relative Homestead Tax.

• Elimination of Mortgage Interest Deduction (MID)- a feature of the tax code since 1933, the MID has helped numerous generations achieve the American Dream of owning a home. A significant public policy objective for decades, homeownership stabilizes families, neighborhoods and communities. The House DFL Tax Bill eliminates the MID for homeowners and replaces it with a "housing credit" for qualified homeowners. The maximum credit is $420, which is equal to 7 percent (7%) of up to $6,000 of mortgage interest paid during the taxable year. However, no credit is applied to the first $4,000 of interest paid. Therefore, a homeowner must pay at least $10,000 in MID in order to receive the full $420 credit. As an example, if a homeowner has mortgage interest of $8,000 in the tax year, the credit equals $280. ($8,000 - $4,000 = $4,000 x 7% = $280).

This provision hurts young families disproportionately because mortgage debt loads are highest when people are establishing their households. This provision changes the financial plans numerous families have made when purchasing a home and increases the financial difficulties many are facing during this economic downturn. At a time when housing is finally getting a financial foothold why eliminate a tax provision that has helped millions of families achieve the "American Dream?"

• Real Estate Property Tax Deductibility -This public policy provision has been included in the tax code since 1933 and allows taxpayers to deduct property taxes paid from their income. The House DFL Tax Bill eliminates the deductibility of real estate property taxes at a time when local property taxes continue to increase faster than Minnesotan's income.
• Relative Homestead- If you own identical houses, with identical values, with identical tax rates you would assume you would pay identical taxes - Right? Not if the House DFL Tax Bill becomes law. In a provision of the bill, authored by a DFL legislator, families that provide housing to other family members will pay more taxes on the second home. The goal of the provision, as stated by the legislator, is to stop parents from buying homes for their college students. MNAR pointed out that this is a small piece of the overall program and instead the proposal will be hurting families trying to assist other family members who may have gone through job loss, divorce or other financial difficulties. Isn't it better to have families provide for families instead of government?

WE NEED YOUR HELP

ACTION REQUEST: To fight this unbelievable proposal we are asking that you take three steps:

1. Please contact your legislator and let them know how you feel about this proposal. Please find attached a list with legislator contact information or use this link: http://www.leg.state.mn.us/leg/Districtfinder.asp
2. Forward this email to your clients, customers and friends. Let them know what is being proposed and give them the web address above to review the bill.
3. Go the extra mile and CALL your legislator about this tax bill. Let him/her know your concerns and how it will impact your clients, your family and your business. Let your Representative know that it is time for our elected officials to "LIVE WITHIN YOUR MEANS" by prioritizing spending and not raising taxes.
   You can access the bill summary (48 pages) at: http://www.house.leg.state.mn.us/hrd/bs/86/HF2323.html

Every now and then I answer questions submitted by buyers and sellers on Trulia, an online real estate search site, which allows people to connect with knowledgeable local real estate agents. Lately I have seen an alarming trend with a few sellers out there who think they can take advantage of the current mortgage and economic mess. That trend is called bailing on your mortgage when you can readily pay.

A few weeks ago, one home seller admitted he was able to keep current with the mortgage he has on a rental property. The rent covers the mortgage, but the house is worth less that what he owes. So he wanted to know if it would be OK for him to stop paying on his rental and just let it slip into foreclosure....all because it is worth less. Now, his home is not even for sale, so there is no need to talk about a short sale. He just wants to jump into the "poor me" foreclosure pool and use the foreclosure mess as an excuse. Heaven forbid a home be worth less.

Just today, another gentleman wants to refinance his first mortgage so it is less, but bail on the second mortgage and stop paying, because he feels they won't try and foreclose on him. It seems he just wants to take advantage of the system and save a few bucks.

See, this is what is wrong in America today, lack of personal responsibility. People want to have it all, but when the time comes to pay the piper, they whine and cry and try to make everyone feel sorry for them. Look folks, if you take out a mortgage and you agree to pay it back, then do everything in your power to live up to that agreement. Not only did you sign the "promissory note" (meaning you promise to pay it back), but you have a moral obligation to live up to your word.

I recall a scene in "Jerry McGuire", when the football stars dad promises Jerry with a handshake, that they will sign with him for representation. He says something to the effect, "my word is stronger than oak". Not surprisingly, later we find his word is worthless, as he signs his son up with another agent.

It used to be that no one signed documents to make a deal...a handshake was all you needed and the word of honor. But today, we have pages and pages of legal papers that must be signed when any deal involves money.

It used to be, that ones signature, and the word of honor, was all one needed to rest assured he would be paid back. But today, a signature means nothing. Personal responsibility is a thought of the past. Society no longer applies moral code to itself. It is an "everyone for himself" world now.

When are we, as a society, going to say enough is enough? When are we going to stop this madness of looking to the government for bailouts? When are we, as Americans, going to bring back a moral code that stresses personal responsibility? Until we turn the tide and do this, expect more questions from home owners on Trulia, asking if it is all right to bail on a commitment they know they can fulfill.

We need to cut off the life line of taking the easy way out.