Did you know that the average home in America averages 2,521 square feet, about 150% the size of the average home in 1977. (We crowded into tiny 1,720 square foot dwellings back then!) Though recent economic trends may lead to smaller homes in the futures, the stereotypical family of two adults and two children (rounded up from the statistical child parts statisticians account for) has enjoyed an increasing amount of space for themselves and their “stuff.”

All of this “stuff” complicates plans to move, do a major remodel, or even free up an area of the home for more efficient use. What happens to the stuff? For some people, the old adage “if you haven’t used it in a year, get rid of it!” is a hard and fast rule; for most people the answer is “store it.” A walk through any Wal-mart, Target, or Junkorama of your choice will lead you to a big area devoted to storage containers in all colors, sizes, and shapes. These containers are a nice way to organize either often-used or seasonal items; they also allow people the chance to add a colorful touch to the basement, attic, or garage where items will linger for years in corrosion-resistant plastic rather than in deteriorating cardboard boxes.

What doesn’t fit at home is often stored in one of the nations 52,000 self-storage facilities. One of 11 American households rents outside space, for an average of 15 months. A whole industry has emerged from a few garages rented out for storage in Texas in the late 1960’s. Current facilities still often resemble garages, though some boast that the units are “climate-controlled,” and may have special storage configurations for boats and RVs.

While consumerism may be at the root of the American Manifest Destiny-like quest for storage space, part also has to do with home construction practices. Many homes have closets and rooms that are too small to accommodate what people own (i.e, home exercise equipment, camping equipment), and Homeowners Associations seldom like to see a big boat in the drive all winter. In areas of the country with more ranch homes and bungalows and their limited storage, the self-storage rates are much higher than in the Northeast. Housing in most areas does not feature attics, as home builders use trusses, rather than rafters to frame the roof, so little space is left under the roof.

Blame it on builders if you like but this trend toward storing unused personal goods brings to mind the rich man in the Bible (Luke 12:18) who preferred to tear down his old barns and build bigger ones to store his extra crops. Americans are great consumers, who at least until the current recession, outspent the rest of the world 2-to-1 on personal consumption expenditures (often on credit, another topic!) That Biblical hoarder died before he could even move his corn. No doomsday parallels are intended here but the storage bins, the mini-storage units, and even the rise of stores selling “home organization” aids are the Twenty First Century equivalent of bigger barns!

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Need a larger home for your stuff? Contact me, Stephanie Fox, today at (612) 721-7495 x 204.

President Obama just signed a bill that reforms certain abuses within the credit card industry that may change life as we know it. The bill won’t take effect until 2010 but wounded lenders are already threatening reprisals in the form of higher rates and more fees. 

The new bill will help consumers in many ways:

More time to pay bills: Bills will be due on the same day every month, no less than 21 days after they are mailed or delivered. No arbitrary time before 5 pm can be set for when the payment has to arrive. No late fees can be charged for payment not made on the due date when it falls on weekends or holiday.

More limited interest rate hikes: Raising the interest on existing balances can only be done under certain conditions. Subprime fees can't be applied until a payment is over 60 days late. Terms can't be changed for paying off old balances. No more interest rate increases because  the cardholder was late with someone else. More notice for interest rate increases.

Limits on fees and penalties: Subprime interest rates charged if a customer was over 60 days late with payment will revert to the original rate once the customer has been on time for six months. Fees and penalties must be reasonable, based on rates set by the Federal Reserve Board. No fee can be charged for making payments, unless they are expedited through a service representative. No over-the-limit fees can be charged unless the customer agrees to have account set up to permit authorization of over-the-limit transactions.

New way to apply payments: Payments above the minimum payment will be applied to highest interest rate items.

Other provisions deal specifically with new cardholders and cardholders under 21.

In the current economy, many card holders who have been late on payments – maybe because they diverted the money to their house payment – have been slapped with high late fees, often compounded with over-limit fees, and subprime interest rates as high as 30% within a short time span. Even when consumers paid most creditors on time, they could be faced with interest rate hikes or credit line decreases based on their performance with other creditors. Interest rate hikes applied to all consumers even extended to old balances. Companies charged excessive fees even to pay the bill. The new law prevents lenders from going crazy with fees and interest rate hikes.

Not everyone is overjoyed with the new legislation. The credit card industry is crying that they will have to raise fees. Consumers who pay their balance in full every month are incensed that they may lose their reward points or be subject to annual fees charged to offset the loss of income. Other critics are disappointed that the focus has been taken away from needed reform that would help housing to promote this bill. Specifically, some are livid that the President is putting his weight behind this bill while not fighting harder for cramdowns that would have changed bankruptcy laws to allow judges to modify home loans.

The new bill does not reward the bad behavior of people who can't or don't pay, but does make the treatment of all consumers more fair. This is a good thing. Even if you personally feel that people have gone overboard with credit, it is hard too feel too sorry for the banks. They have a year to find ways to recoup any losses they may incur as result of the new law, so it is unlikely they will pay a great price for being forced to act responsibly. Consumers are likely to pay, one way or the other, but many people will be forced to reassess their relationship with credit and how they use it.

Need help in assessing whether you are creditworthy to buy a home? Contact me, Stephanie Fox, today at (612) 721-7495 x 204 .

Buyers who are still waiting for the residential real estate market to hit bottom may have waited too long. The first week in May is signaling changes and while there will still be bargains to be had, they might become harder to find.

Housing sales were up for the second month and after five months of declines. At the end of March, there were 3.74 million existing homes on the market, taking an average of nearly ten months to sell. But foreclosures, short sales and bank-owned properties are suddenly selling briskly.

At the beginning of 2009, it was not uncommon to see foreclosed homes sit on the market for a year or more. Suddenly, starting at the end of April, real estate agents who specialize in foreclosed and bank-owned homes are reporting getting multiple offers after only a few days. Many of these homes need work. Some need a lot of work. Many of these buyers are investors, bringing in professional crews to fix and resell the homes in a couple of months. But, first-time buyers account for more than half of recent home purchases.

For those planning on living in their newly bought homes, low interest rates and the $8,000 tax credit/rebate for first-time buyers can help pay for needed repairs. Before clinching the deal, buyers need to have an eye for potential and an ability to look beyond bad paint jobs, ugly carpet and dirt. They also need to hire a professional inspector take a look at the house. It’s best to find hidden problems and be able to walk away before the final papers are signed than to discover that the ‘cosmetic only’ fixer-upper needs all new plumbing or major electrical work.

Handymen and women have an advantage, but whether new home buyers plan to do the work themselves or have experts do it for them, they need to factor in the costs of repairs. Real estate experts recommend that buyers come armed with a sharp pencil and knowledge what they can afford. If there are multiple offers, buyers should avoid getting caught up in a bidding war and paying more than the home is worth or more than they can afford. There are always more homes coming on the market from which to choose.

The price of foreclosed properties have also driven down the price of other non-foreclosed homes nearby and sometimes these homes are even better deals. They are usually in good shape and buyers have more bargaining power than with a foreclosure home, when every negotiation has to go through a bank.

The warmer weather and longer days are also a factor bringing out the buyers, especially in colder climates. Will this summer see an end to cheap homes prices? Maybe and maybe not. No one knows for sure, but what is certain is that right now is a good time – especially for first-time buyers – to buy a home.

If you are ready to take the leap into purchasing or selling your home, contact me, Stephanie Fox, at (612) 721-7495 x 204 or email me.

A new tax provision is offering capitol gains relief for widows and widowers who want to sell their houses after a spouse has died. While married couples can exclude a profit of up to $500,000 when they sell their home, single people are limited to a $250,000 tax break. Until recently, a widow or widower was considered a single person in the eyes of the IRS. But now, a surviving spouse can take the full $500,000 deduction if they sell the home within two years of their partner’s death instead of the previous one-year limit. The home must have been used as a principal residence for two out of the last five years and the spouse must remain unmarried until the home sells. Surviving spouses can subtract any money put into the home for repair and improvements. The new provision reflects the slower housing market and perhaps, a small amount of compassion that was forcing people who had just lost a life partner to make other difficult decisions too soon.

For help buying or selling a home at any stage of life in the Minneapolis area, contact Stephanie Fox by email or phone, (612) 721-7495 x 204.

There are a lot of people who are beginning to take advantage of the post-bubble home prices of bank owned properties to make a housing purchase before the chance is gone. If you are one of them, there are some things you should know before you make an offer.

Banks have no emotional ties to influence their side of the negotiation. The only thing banks care about is the amount of money in the offer. They often won’t accept that low-low-ball offer, but will accept some offers below the listing price. If your offer is too low, the bank will simply reject it. If the offer is within the amount the bank will accept, they will counter with changes, probably the only counter they will make. If there are multiple offers, banks favor the buyer who plans to make the house their home as opposed to the investor who will not.

Quite often, banks will have their own dense and legalistic forms that are unlike the usual purchase agreement forms used by real estate companies. Read these carefully, having your agent explain things you don’t understand, before you sign.

Once an offer is submitted, be patient. The purchase agreement you sweated over will go to the bottom of a pile of offers on the dozens of foreclosed properties assigned to the over-worked loss-mitigation worker you’ve been assigned. It can take two to three weeks to get an answer and nothing you or your real estate agent can do will speed up this process. However, once the bank either counters or accepts your offer, things will move quickly.

Banks want rock solid proof that you can pay for the home you want. Don’t delay seeing a mortgage lender to find out exactly home much home and what kind of loan you can afford. Do this before you start looking at homes.

Some banks will allow a small amount of seller paid closing costs, but not always. Don’t ask for this unless you have no choice. While quick closes are often possible, banks discourage closing dates over 30-days past acceptance and can charge a daily fee for every day over their 30-day deadline.

Personal property like appliances have often been removed from the property by the seller or by the bank and shouldn’t be included in your offer. Former homeowners who have had their houses taken away by the bank may cause revenge damage or have simply deferred needed repairs because they didn’t have the money. Some need a few cosmetic repairs but others need thousands in professional repairs and replacements. The bank isn’t going to tell you about these problems. Pay the extra money for a professional home inspector so you’ll know just what you’re buying.

Email me if you are interested in buying a bank-owned property in the Minneapolis area, or give me a call at (612) 721-7495, ext 204.

You may have heard by now, but there is an effort in the Minnesota House to pass legislation that will potential harm the already-struggling real estate market. On April 20, the Minnesota House of Representatives Tax Committee released a "delete all amendment" to HF2323 and added provisions that are negative for real estate in the Omnibus Tax Bill. The measure would essentially eliminate most of the state tax deductions that home owners currently claim, thereby increasing their state income tax. The call-to-action for all real estate agents, homeowners and other concerned individuals has been circulating via email and blog posts the past few days. I am asking my readers to act by contacting your legislatures via mail (not email) and phone and by spreading the news on to others. Feel free to reblog this post. To read the Minnesota Realtor’s Association statement about the legistation, and to access the email to forward, click here.

Little things can make a big difference in selling your home

If your real estate agent suggests that you spend a little time staging your home, you should listen to this advice. While you may love your home as it is, a buyer is looking at your house through entirely different eyes. Staging your home emphasizes your home’s best features while deemphasizing any weaknesses. Staging need not be expensive – there are a lot of little things a home owner can to make a good impression without spending a lot of money.

First, repair anything that needs fixing. It’s easy to live with minor problems for years, but a buyer seeing your home for the first time will notice small imperfections. Let your real estate agent help you do a survey of your home and don’t feel slighted if problems are pointed out to you.

Once everything is repaired, clean your house from top to bottom, even in places you think people will never look. (They will.) Windows, mirrors and hard surface floors should gleam. Clean the grout, not just the tile. If the walls are dingy, refresh them with new paint. Sweep the garage and considering painting the garage floor. Don’t scrimp on lighting. A bright home makes a good impression while a dark home will seem smaller and dingy. Avoid overhead lighting except in work areas. Table and floor lamps give softer shadows.

If a room is crowded with furniture, get rid of some pieces, even if you just move them to the garage. Pack up personal items and knickknacks (you have to pack them to move anyway) including family photos, awards and religious items. Remove fridge magnets and notes. A good rule of thumb is that there should not be more than four items on any flat surface, including floors and walls. Your goal is a home that’s attractive but impersonal, so the buyers can picture themselves living there.

In neutral colored rooms, add a spot or two of bright color (a throw pillow, a vase with fresh flowers, a brightly colored tea pot, perhaps.) Move furniture away from walls into cozy groups, which will make the room seem larger and friendlier.

Your front door is the first thing a buyer sees, so consider painting it a bright, welcoming color. Currently, deep red is popular, but other colors can also work. Avoid primary colors, but chose colors that are in style and that are found in nature. The paint expert at your local hardware store can help you choose. In warm weather, bright flowers outside the front door will increase the ‘welcome’ effect.

Once a buyer makes an appointment to see the house, do a quick cleaning and straightening job. Hang up clothes, put away dishes, toothbrushes and cleaning supplies. Make the beds with matching linens. Dishes shouldn’t be left drying in a rack. Even the bathroom cup should shine. Wipe out all sinks and, for heaven’s sake, put the toilet lid into the down position (unless you think buyers are in love with exposed plumbing.)

The result of a well staged home is a house that should sell for more money and in a shorter time. The time and money you put in to staging will be worth it at closing.

Contact Stephanie Fox for more tips specific to your home.

It will also help new home buyers.

Hidden within the thousands of pages of the stimulus package, also known as the American Recovery and Investment Act, is one aimed at encouraging first-time home buyers to stop waiting and start buying.  The first-time home buyer credit has been changed for the better. Instead of up to $7.500 tax credit to be paid back over the next 15 years, that amount has been increased by $500 to $8,000 and no longer has to be paid back. I'm going to repeat that last part; the tax credit no longer has to be paid back.

The dates have changed also. The new provision requires that the home be purchased between January 1 and December 1 of 2009. Even if you don't make enough to pay $8,000 in taxes, don't worry. You will get the difference in a tax credit, giving buyers a little extra spending money next year. Plan to declare this on your 2009 taxes. If you already bought a home and took advantage of the old rebate on your 2008 taxes, you can file an amendment for the new rebate.

Buyers making more than $75,000 for singles or $150,000 for couples filing jointly are not eligible.

Want to know more? Call me at 612-728-2204 or email me at spfox@cbburnet.com and put "First-time buyer" in the subject line.

Homeowners facing foreclosure may be seeing a helping hand from the federal government, but most of the details won't be released until March 4, at the earliest.

What we know now is that homeowners who are under water (their house is now worth less than they owe on their mortgage) or who are in danger of falling behind in their payments because of life circumstances, may soon have a way to refinance into a more affordable loan. Not everyone will qualify. As of now, the relief is available for first mortgages and only to those whose mortgage is held or secured by Fannie Mae or Freddie Mac.  If you don't know if you qualify, contact your mortgage holder and ask if your loan is included in these categories.

"We are still trying to digest the information," said Ed Nelson, the marketing and communication manager at the Minnesota Home Ownership Center, a non-profit created to help homeowners in financial difficulties. "As with many things with the government, there's a time lapse till it gets down to street level. Participation is voluntary, so the details of who can qualify and which lending institutions are participating won't be announced until March and even after that, many lenders will take their time about deciding whether to sign on. "

The Treasury Department is still deciding the monthly income limits, minimum and maximum loan amounts and other details.

The American Kennel Club has recently released their list of the ten most popular dog breeds for 2008.  In addition to the national rankings, they did a city by city inventory and found that the Minneapolis and St. Paul dog popularity rankings were out or the ordinary when compared to many other cities.

The national list as well as many city lists include the Beagle, Dachshund, (English) Bulldog and the Shih Tzu. But, Twin Citizens seem to prefer the Brittany and the English Springer Spaniels to those breeds.

The Bulldog, shows up on the list of the top ten most popular breeds for all American cities cited except for Minneapolis/St. Paul, Portland (Oregon), Raleigh (North Carolina) and Salt Lake City (Utah). Large dogs take up more than half the Minneapolis/St.Paul list and only one, the Yorkie, is a toy breed (although some of the poodles might be toy and miniatures.)

American's Top 10 Breeds for 2008 are:
1. Labrador retrievers (in its 18^th year as #1)
2. Yorkshire terriers
3. German shepherds
4. Golden retrievers
5. Beagles
6. Boxers
7. Dachshunds
8. Bulldog
9. Poodles
10. Shih Tzus

Minneapolis/St. Paul Top 10 Breeds for 2008
1. Labrador Retriever
2. Golden Retriever
3. Boxer
4. German Shepard
5. English Springer Spaniel
6. Yorkshire Terrier
7. Poodle
8. Cavalier King Charles Spaniel
9. Rottweiler
10. Brittany

Dogs can get salmonella, but it doesn't happen often. A dog has a shorter digestive system that allows them to eat old bones and snack out of the garbage so food passes through before the disease can take hold. When dogs do contract salmonella, they can exhibit diarrhea, sometimes tainted with blood. It can be a messy disease in dogs, not a fatal one.

Still, it's not good to feed your beloved four-legged family member tainted food. The recent peanut-butter and subsequent recall includes dog food, especially dog snacks. If you want to check to see if your dog's favorite food is on the recall list, go too:
Pet Food Recall

Many of these dog food products are not available in Minneapolis and St. Paul, but it's better safe than sorry.