Jennifer Kirby, the Luxury Agent

For the last two weeks I have been talking with a home owner who is looking to sell their home this upcoming Spring. I sent him information about myself and what I offer to clients, then researched his home to figure out a price that it would sell for.

We met last week, and after touring his home, we sat down to talk price. I showed him the comparable sales for his area, square footage, and amenities. Sounds just like your typical listing appointment, right?

Well, I about fell out of my seat with what he told me he felt his house was worth. While I sat there and told him his house would sell in the $700K range, he gave the price of $1.3 Million. In contrast to the cartoon, he was seeing his home as the Tax Assessor sees it, and I was seeing it as it truly was.

Granted, the home does have a lot of nice features and expensive upgrades/remodeling, but the square footage and style of home make it less valuable in the eyes of a buyer and appraiser.

To try and prove his price was correct and mine was way off base, (of course I looked at it vice versa) we went out this week and looked at homes currently on the market in a wide range of prices. Every home we looked at, he valued $200-500K less than list price, while I looked at many of them and only discounted a little. When all was said and done, he told me he had reevaluted his price, and decided that $1.3 Million was too high, and that he would bring it down to $1.2 Million. At this point, I knew it was a lost cause and told him that I would not take a listing that was so overpriced.

I believe in complete honesty, with very little sugar on top. There was no way in hell his home would sell or appraise for that price, but he still felt that I was the crazy one. He asked me me how much marketing it would take to get him that price, and I told him the only thing I could. I could throw all the money in the world at marketing his home for $1.2 Million, but it would just be a waste...no one will buy his home at that price.

Thankfully, the home owner was not mad at me for my honesty and we shook hands, walking away amicably. A few people I have told the story to have said "What a waste of your time". But I tell them it was the exact opposite. Taking the extra time I did helped me avoid a lost cause. It saved me thousands of dollars in marketing costs, including the time, energy, and work I would have put into selling the home.

I hope the next agent he speaks to is as honest to him as I was, and doesn't agree with him just to get the listing, but we all know what will most likely happen. At least I can rest well knowing that I wasn't the sucker.

They may not exist in vast numbers, but currently there are 51 condominium units available city wide priced over $1 Million. Here is the top five countdown for most expensive luxury condominiums in the Twin Cities area:

1. Phoenix on the River in Minneapolis – trying to live up to its luxury billing, the most expensive unit for sale in the Twin Cities could be yours for a mere $4 Million. It is located across the river and has fantastic penthouse views of downtown. With 3 bedrooms/5 bathrooms and over 6200 square feet this condo unit is under construction so right now it is only a dream.
2. The Harrington House in Wayzata– this three bedroom/three bath unit has over 4400 square feet, with amazing views of Lake Minnetonka. A few years ago these units were topping $5 Million, but this unit is listed for great price of $3.9 Million.
3. Washburn Lofts in Minneapolis – $3.5 Million: Built in 2004, this 2 bedroom/3 bath condo unit has 4200 finished square feet and takes up the entire penthouse level. The night time views of the Minneapolis skyline are nothing but stunning, featuring 270 degree views of Minneapolis and the Mississippi River. Did I mention that is comes with its own terrace?
4. Phoenix on the River– did I forget to mention that this development holds not only the number one spot but number four as well? This under construction unit has 4 bedrooms/4 baths and over 5800 square feet, but is a little cheaper at $3.5 Million
5. The Manhattan House in St. Paul – oohhhh, this one is really pretty, not to mention the fantastic views! Located in downtown, this two level penthouse has 2 bedrooms/4 baths, and over 5000 square feet and is probably my favorite of the five. It will cost you just under $3 Million, but hey, that’s pocket change, right?

View photos of these condos at the Minneapolis Luxury Real Estate Blog.

In light of recent experiences I have had with local Twin Cities new construction home builders, I make it a point to tell buyers that they should thouroghly research any builder they might contract to build their new home. Some builders are barely keeping their business above water, and others are slowly sinking, but if you spoke with these builders, most likely they would tell you they are doing" a lot" of business. Don't believe them. Here are some tips to consider when building a new home:

• Ask the builder how long they have been in business under the current company name.If it is a short period of time, ask them if they, or anyone involved with company, has been a builder/contractor under a different name. Believe it or not, there are some fairly sizable builders in the Twin Cities who have declared bankruptcy, gotten in trouble with the state, etc, and closed their doors, only to open up under a brand new entity name. Of course, they don't disclose this to potential buyers.
• Ask the builder if their company name is the same as their legal corporation name. Sometimes builders "Do Business As" (DBA) a different name. You can research both names with the Minnesota Secretary of State and find out if they are in good standing.
• Ask for the Builder's License Number. They should be able to give it to you on the spot. If they don't, consider this a red flag. Once you have the number, research the builder with the Department of Labor and make sure their license number corresponds with what you were given. Believe it or not, some builders have been using another builders license number to pull permits, illegally of course.
• Find out who owns the company. Go to the Judicial website and see if there are any active judgments against the owner and/or the company. Pending cases brought against the builder by clients or trade professions could be a red flag.
• Ask for References. Don't just get the good, but also ask to speak with someone who was not happy to see how the builder resolved the issue. It could give you a clue on how the builder professionally handles complaints.
• Don't just take the builder's word for it. I can't tell you how many times I have been lied to by a builder as an agent, and it just makes me more mad when I meet buyers who were lied to as well. If you have contracted with a builder, make sure all permits are pulled for the work being done. Once again, some builders are doing work without a permit, and when the city finds out, and the project shuts down, the buyer is the one left in limbo. Don't be afraid to call the city and ask them if proper permits were pulled.
• Find out who holds the escrow money. I don't like the escrow money being held by the builder. If a builder cannot finance the permit on his own, then I question their financial standing. I have run into buyers who have had problems with builders and had to cancel the contract, only to find out the builder has spent the escrow money and doesn't have the funds to pay the buyers back. It just turns into an awful mess. See if the money can be held by a title company.
• Don't go with a builder just because they have a great lot. The worst thing you can do is fall in love with a lot that is owned by a builder that you are not excited about. Trust me, it is the kiss of death! I know two buyers currently (not my clients) who went with a builder because of the lot and the homes are falling apart. They were warned about the builder, but they said they would take their chances because they were so blinded by the lot.
• Don't be afraid to ask questions. Ask everything you can think of, and don't hold back even on the things that seem minor.

These are just a few things to think about. "Google" the builder, too, and see what pops up. For instance, a recent article in the Star Tribune highlights how some local builders have lost their license recently or been fined in the past few months.

Now I am sure this question will draw some interesting responses, so I hope to not cause too much of a stir, but after reading a Code of Ethics update emailed to me by the Minnesota Association of Realtors, I have to wonder if Realtors who market themselves to the gay, lesbian, and transexual communities, are now going to be in violation of Article 10 in the Code of Ethics.

In case you don't know, a major change to the Code was voted in for Article 10, adding the terms "sexual orientation" to the group of discrimination protected classes:

Here is the amended language of Article 10 (additions are underlined):

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on tis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation

So I can assume we are all in agreement here: adding "sexual orientation" to the above language is a good thing, since Realtors are held to higher standards.

BUT, where problems could occur for Realtors that promote themselves solely to gay communities is a change to Article 10 Standards of Practice 10-3:

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

According to this new amendment of 10-3, Realtors cannot discriminate against ANY sexual preference. So my take is that now those Realtors who specialize in gay communities and directly market, advertise, or circulate any statement of their specialty are now discriminating against those that are straight.

To me, this amendment is vague. At first glance I thought it read that no ad could say "no gays", for example, a home owner that tells his agent to advertise "no gays allowed" or the like, but upon further thought, it could stretch to cover agents that say they work for those of different sexual preferences. By an agent putting out an ad that says "Specializing in Gay Communities", it seems they are now in violation of the Code of Ethics, and I am sure those Realtors are not going to be too happy if that is the case. There are even real estate companies out there that have the term "gay" in their brokerage name, so what happens to them?

Please, let me know your thoughts on this. I find it kind of upsetting that NAR did not think of this take on the change, as it will greatly effect Realtors nationwide.

Originally posted on my blog Twin Cities Real Estate Buzz

Throughout the Twin Cities, and especially in Minneapolis and Saint Paul which have the highest number of vacant homes, it is bound to happen that uninvited guests might take it upon themselves to utilize your vacant property. Those less fortunate souls, either out of a job or out of a home, decide it is ok to break into a house and live there for a while. They don't care if what they are doing is illegal, and some even justify it as their right. However if any squatters reading this post are planning on doing this in the near future, then you might want to make sure you don't choose a home that is listed with a real estate agent.

It happened recently to one of my clients, and is the first time I have run into it personally with a listing. A seller that lives out of town puts a rental property on the market, and seeing as he wants to sell it quickly, he leaves it vacant with no appliances. Being in a not so great neighborhood, it doesn't get a ton of showings. But low and behold, on Friday afternoon when I am laying in bed sick, I get a call from an agent who just showed my listing. Apparently, she and her client had walked completely through the home, coming to the bedroom at the back of the home, when they heard music coming from inside. The agent of course knocked to alert who was ever in the room that she was there, and the lady behind the door started screaming at the agent to get out. The lady then demanded to know how the agent got in the house. This friendly agent promptly told her that she used the key, which was obviously not the way the lady had gained her access to the home.

So I dragged myself out of bed, jumped in the car, and at the same time called the police to tell them we had a squatter and asked them to meet me at the home. There was no way I was entering the home without some armed help! When we all got there, on officer went in through the front door, while two others surrounded the back. (I was pretty surprised they brought three officers for little old me). Upon entry, the lady was gone, which was no big surprise. I mean, even a squatter can figure out that the jig was up. However, she had left behind all her stuff, which meant she was most likely coming back at night.

She had moved in quite well, and been there for about two weeks. All her toiletries were in the bathroom, including perfume, and she was making use of the free water and working bathroom. In the bedroom she had a large blow up mattress and plenty of clothes in garbage bags. She had a light and radio. The real kicker came when one of the police officers opened up the front bedroom door, only to have a ferret come running out, with a black bunny rabbit behind him. The squatter was so kind to let them use the carpet as their bathroom. We put all the animals back in the room and closed the door. The officers were really nice, and told me to have the owner call them if he wanted them to meet him at the house as well. With nothing left to do, I re-secured the house (hard to do with broken doors) and called my client.

After informing him of the days events, he drove down the next day, with police officers backing him up, too. Sure enough, she had broken back in that night and removed all her stuff, animals included. The home owner had to clean up after her, paint over some grafitti on the wall, remove the soiled carpet, and replace three broken doors. I also informed him to turn off all the utilities so no one could take advantage again. He left the kitchen light on and informed the neighbors of what had happend, asking them to keep an eye on the place. The squatter never came back and the place had no further problems.

Lesson learned?

Make sure you properly secure a vacant home. The doors on this home were older, so they were easy to break into. Also, the front door had glass in it, so the squatter was able to break the glass and reach in to unlock the deadbolt. Putting strong doors and boarding up windows is one sure way to keep trespassers out. Also, don't leave utilities on which can be used by the squatter/trespasser. That's just like being a kid in a candy store, after all, how can a homeless person resist a hot shower and a working toilet? I know I couldn't.

I was shocked to hear from a neighbor across the street, who approached me when I arrived at the home, that she had seen someone crawl through the side window a few times the week before, but didn't take it upon herself to call the police or me. My number is on the real estate sign in the front lawn after all. I find this sad because this is her neighbor and her neighborhood, and everyone should keep a look out for suspicious activity. Wouldn't she want a neighbor to call the police if someone was entering her home illegally? I personally would not feel safe in my own home if I knew someone was breaking into the home next door. But hey, that's just me!

One last note, needless to say, the buyer who viewed the home with the squatter there did not put an offer on the home. Squatters kill deals, just as an FYI!

Tell me your stories about squatters in your vacant homes!