But a lack of funds isn’t necessarily the only issue. Even home owners with fat wallets and a love of congregating and cooking in a stylish kitchen may not want to invest so much, given the up-and-down nature of today’s housing market.

Specifically, two factors are holding back home owners from taking on kitchen redos:

▪ There’s no guarantee that prospective buyers will like, say, the sellers’ tangerine-painted walls — even if orange is oh-so-chic these days — or that a restaurant-style range will win them over, especially if they’re better at calling for reservations or take-out.

▪ The dollars invested may never be recouped, no matter how long home owners stay put. An upscale overhaul will return only about 57 percent of the money spent on the project, and a mid-range redo about 66 percent, according to the Cost vs. Value Report.

But the good news for those who still feel their current kitchen won’t do is that there’s loads of inspiration to appeal and borrow ideas from — those handsome rooms shown in the background of Food Network programs and other TV shows and movies, for example, or glossy home and design magazines.

The kitchen remains an important gathering space for many home owners — and one of the first places would-be-buyers look to decide if they’re interested in a purchase. Because of that, it should be a goal to make the kitchen as nice as possible with the funds at hand. Even if a seller or real estate agent has $20,000, $10,000, or just $5,000 to spend, those dollars can deliver a lot to make the kitchen look and function better.

Here are a dozen low-cost ideas you and your clients can use to improve this critical room:

▪ Paint remains the least expensive change agent. Home owners should take their cue from other colors in the room that are likely to stay — the “nonperishables,” says Chicago-based designer Mary Lou Kalmus. It might come from the backsplash or floor tile, or if the entire room is swathed in neutrals, it could be colors in the rest of the house, such as in an adjacent family room. Because the kitchen gets heavy use, it’s best if they use at least an eggshell rather than a flat finish.

▪ Backsplash tiles can be replaced, but Kalmus suggests home owners do so from the base of the upper cabinets down to the countertop — a full 18 inches is recommended. Top on her list of favorite choices are glass or newer-looking metallic tiles. She also suggests running them vertically rather than horizontally for a less-expected look.

▪ Replacing a countertop or two can help a room make an instant, fresh impression. And if money’s tight, home owners can go with a laminate rather than granite. To prevent laminate from scratching or showing burn marks, a textured choice is best.

▪ Tell clients to go with decor icons such as stainless steel that tend to appeal universally, says design expert and author Christopher Lowell, based in Santa Fe, N.M. They can start by replacing some dated and dysfunctional appliances with purchases at places like Sears or Costco, which offer professional-style models that bring a restaurant look at affordable prices. Once home owners introduce stainless options, they may want to run with the idea throughout — e.g., paper towel holders, trash cans, and cookware, Lowell says.

▪ If all the older appliances can’t be replaced, home owners might be wise to focus on one or two, which can still make a difference. Because the refrigerator may be the largest item in the room, Kalmus suggests changing it first if it’s old or small and considering a model with French doors, which offers the plus of storing larger items inside both the refrigerator and freezer sections and having a freezer on the bottom. For highly efficient cooking, plus the advantage of having instant on-off heat, an induction cooktop is another wise new appliance choice, though the newer technology often costs more. And even a new hood that’s more updated or visually interesting can provide a good focal point, says Los Angeles–area designer Christoper Grubb, president of Arch-Interiors Design Group.

▪ Betterlighting can make a huge difference in how much time home owners want to spend in their kitchen and how well it shows to buyers. The best spaces incorporate three essential layers: recessed lighting for an overall effect, with 4-inch rather than 6-inch cans for a less obtrusive look; undercabinet lights to perform tasks, with efficient LEDs or xenon bulbs for quality and energy efficiency; and a decorative fixture or two for mood-making such as pendants, sconces, or a chandelier. Bulbs should depend on manufacturers’ recommendations, but now often are halogens or incandescents. “The decorative choices can add a new design vocabulary to the room,” says San Francisco architect Christian Dauer.

▪ Small 8-inch floor tiles can quickly date a room, as can busy patterns. So replacing them with 16- to 22-inch porcelain floor tiles may make good economic and design sense, as well as decrease maintenance. A bigger budget may permit natural stone. Dauer is keen on wood floors since they’re easy on feet and favors bamboo and cork or a repeat of a wood used elsewhere in the home.

▪ Top on the “get-rid-of list” for many home owners are dark, dated cabinets. But since cabinetry represents 60 percent of many kitchen remodeling budgets, it’s often not possible to replace it totally. Several possibilities exist: Replace the doors or take a less expensive route and repaint them, suggests Kalmus, who also offers some caveats. Be sure the interiors still offer enough room and work well, or else the solution is just a temporary Band-Aid she says, and be sure the paint will cover well since sometimes it won’t if they’re very dark. “Full-overlay doors, for example, usually can be refaced, but the sides may first need sanding and prepping,” Dauer says. For a different punch, Lowell suggests replacing one or two doors in frosted glass within stainless steel frames, while Grubb throws out the idea of removing the fronts completely for a European look. In most cases, new spiffy knobs can make a huge improvement.

▪ For those without sufficient storage— a common complaint of older or poorly arranged kitchens — try finding a closet even if not right in the kitchen but in an adjacent space. The best pantries are equipped with shelves of different heights to arrange a variety of canned goods and with pull-out drawers to make reaching to the back easier.

▪ Because open layouts are high on many buyers’ wish lists, taking down a wall or part of one between a kitchen and adjacent space should be considered if the kitchen is small and closed in and the wall isn’t a load-bearing, supporting one. Be careful that vents aren’t running through it, or be prepared to replace them, Kalmus says. If this isn’t possible, home owners might change out windows or doors for better light, views, and insulation. A new greenhouse-style window can become a spot to grow herbs and small plants.

▪ If home owners have room for an island, but are tight on funds, they might buy a gleaming, stainless-steel, counter-height table from a local restaurant supply store with a shelf underneath, add a few chopping boards from the same supply, and create a professional-looking center they can take with them, says Lowell. This addition also helps free other countertops of clutter.

▪ If the ultimate goal still is to gain a brand new kitchen when dollars permit, a better use of limited funds may be to hire an architect or designer skilled in kitchen planning to draw up a detailed layout that can be bid out later. Many design pros charge a flat fee or hourly rate. Dauer says the price will vary depending on the part of the country, size of the room, wish list, and extent of the remodeling work — if plumbing or HVAC systems need to be changed or walls taken down. His best guess is from $135 on up per hour. Chicago architect Allan J. Grant pegs it at between $90 and $150, depending on the person’s experience, plus reimbursable expenses.

Article by: Barbara Ballinger from RealtorMag.realtor.org

Finally, an updated home with an open kitchen and great floor plan came on the market, in the highly desirable Field neighborhood in South Minneapolis. Just a block away from wonderful restaurants, shops and bars, this location was ideal for them. We moved quickly and made an offer, negotiating all brand-new windows and other items into the purchase agreement.

Kristy and Jess, we were so glad to be a part of helping you find your home and very much look forward to seeing you enjoy the home over the next years.

Congratulations on your home ownership!

In the Twin Cities region, for the week ending May 5:

• New Listings decreased 6.6% to 1,643
• Pending Sales increased 41.9% to 1,232
• Inventory decreased 28.3% to 17,579

For the month of April:

• Median Sales Price increased 12.1% to $162,500
• Days on Market decreased 15.1% to 135
• Percent of Original List Price Received increased 3.6% to 93.4%
• Months Supply of Inventory decreased 43.1% to 4.7

Local Market Updates:

Minneapolis Homes:
There are 65 ACTIVE LISTINGS. There were 5 NEW LISTINGS, 3 PENDING & NO SOLD last week.

Maple Grove Townhomes:
There are 24 ACTIVE LISTINGS. There were 5 NEW LISTINGS, 2 PENDING & 2 SOLD last week.

City of Plymouth:
356 Active homes and 16 Sold homes last week.

City of Wayzata:
61 Active homes and 2 Sold homes last week.

City of St. Louis Park:
256 Active homes and 4 Sold homes last week.

Looking for active/sold homes in your local community? Email office@kerbyandcristina.com and we’ll feature your area next week!

For full local update information, visit The Skinny

Mortgage bond prices continue to show record strength this week . Bonds have pushed up against the all-time highs and these frothy prices in bonds have translated to record low mortgage rates. Mortgage rates in the mid to upper 3’s for a fixed rate may be here for a while as we watch a combination of weak economic data on the employment front, eurodrama with Greece threatening to leave the EU, and stocks taking a hit with JPMorgan Chase’s announcement of a $1B trading loss driving funds into the safe haven of US bonds. We could see mortgage rates in the short term reverse a bit, either way, now is the time to lock, whether refinancing or purchasing.

Mortgage Rates as of Friday May 11, 2012 ( purchase transactions )

30 day rate locks, subject to credit score and loan to value edits

FHA

30 year fixed 3.75% 0% origination fee

3.50% .50 origination fee

Conventional

30 year fixed rate 3.625% ( 30 day lock )

15 year fixed rate 2.875%

5/1 ARM 2.50%

7/1 ARM 2.875%

1. On average, to get a short sale approval, it can take 60-90 days.

There could be mortgage insurance and an end investor on the loan as well as the servicer, which means it has to go through three different processes. Bank of America could be the servicer on the loan but they do not actually own the loan, so, the short sale has to pass their guidelines, then go to the mortgage insurer if there is one, then to the end investor like Fannie Mae and Freddie Mac. If you are a buyer and can’t wait at least 60-90 days for an approval and then another 30 days to go to closing, then you need to look at other houses. The worst thing you can do is tie up a house that is in a short sale with no intention of being patient while waiting for a short sale approval. Approvals can come sooner than 60 days, but industry standard is at least 60 days to get an approval or denial.

2. There is a general assumption that you can purchase a short sale for 40-50% under its listed price. In a short sale the bank comes out and does a valuation of the property and will expect a slight discount, but will not accept a huge amount under the market value.

Hopefully, if the agent who is handling the sale is experienced, they will have already gotten an approved list price from the bank by the time you are interested in making an offer. The bank will usually be willing to negotiate on that price, but will not, in almost every case, take 40-50% off of that price. To that point, you may be able to get a reasonable deal on a short sale, though it will not be, in most cases, as much of a deal as you may be able to get on an REO (foreclosed property). Also to that point, most short sales will be in better condition than an REO. When you look at the potential repairs a comparable REO needs and the time and expense it can take to do those improvements vs. a short sale being sold at a slight market discount with improvements already made, the investment could even out. There are REO properties that can be picked up for a huge discount, but require massive repairs that a comparable short sale may not require.

3. Short sales are a very difficult process and it takes a qualified person to handle this type of transaction.

With this type of transaction it takes a very experienced agent on the listing side as well as the buying side. Make sure before you move forward on the transaction that the listing agent has ample experience dealing with these types of transactions, or you could be tied up in a contract for months that never goes to settlement. There are several different types of short sale processes and each bank’s process is somewhat different; it takes a professional who has had experience with all of these different types of short sales to help facilitate a successful transaction.

4. In most short sale transactions the properties are sold “as-is” and no repairs will be made.

Although there are some exceptions to this rule, speaking in general, short sales are sold “as-is” and no repairs will be made even if they are found during a home inspection. In most short sale transactions the bank will require both the buyer and the seller to sign an addendum that states the property is being sold “As-is” and no repairs will be made.

These are just a few short pointers for buyers who are looking to purchase a short sale as they are a reality in every market, and if you have the patience you may be able to get the home you are looking for at a discount!

By the KCM Crew on May 8, 2012

We had a buyer consultation at Caribou Coffee and discussed his priorities and needs (no major fixer upper!); connected him with a loan officer and he was pre-qualified within a few days. We went out a few times and looked at homes, narrowing down the options more and more to his priorities, especially having a location that was within 10 minutes or so from his work, and that would offer him a great fenced-in yard for his dogs. One day, we found the right home and made an offer immediately, negotiating a deal before the scheduled open house that weekend. We locked it up and the house was Matt’s!

The inspection went great and Matt returned to the house a couple times to get bids from contractors for some wonderful updates he wanted to make to the house, including a privacy fence, refinishing the rare hardwood floors underneath the carpet and plans for a future deck. The house is going to be incredible! Matt, it was so much fun getting to know you and to see you find a place where you can settle in and add all your own finishing touches!

In the Twin Cities region, for the week ending April 28:

• New Listings decreased 14.9% to 1,475 • Pending Sales increased 21.4% to 1,187 • Inventory decreased 28.0% to 17,603

For the month of March:

• Median Sales Price increased 7.1% to $149,900 • Days on Market decreased 9.7% to 144 • Percent of Original List Price Received increased 3.8% to 92.1% • Months Supply of Inventory decreased 37.2% to 4.8

Local Market Updates:

Crystal Homes:
There are 46 ACTIVE LISTINGS, 7 NEW LISTINGS, 1 PENDING & 4 SOLD last week.

Golden Valley Condos:
There are 42 ACTIVE LISTINGS, 2 NEW LISTINGS, 2 PENDING & NO SOLD last week.

Maple Grove Condos:
There are 22 ACTIVE LISTINGS, 3 NEW LISTINGS, 1 PENDING & 1 SOLD last week.

Minneapolis Homes:
There are 67 ACTIVE LISTINGS, 3 NEW LISTINGS, 4 PENDING & 1 SOLD last week.

For more local updates, visit The Skinny

It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

Market Watch also addressed the short sale situation recently:

Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.

Why Are the Banks Now Leaning Towards Short Sales?

The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:

Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.

The Market Watch report breaks it down further:

Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.

How Many Short Sales Could Be Completed?

JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:

RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.

How Long Will Short Sales Be a Major Part of the Market?

The NECN article shows us that short sales are here to stay for some time.

According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.

Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.

Written By the KCM Crew

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

Source: “Traditional ‘Rules’ of Home Buying Return,” US News & World Report (May 1, 2012) and RealtorMag

In the Twin Cities region, for the week ending April 21:

• New Listings increased 13.9% to 1,677 • Pending Sales increased 41.2% to 1,281 • Inventory decreased 28.4% to 17,447

For the month of March:

• Median Sales Price increased 7.1% to $149,900 • Days on Market decreased 9.7% to 144 • Percent of Original List Price Received increased 3.8% to 92.1% • Months Supply of Inventory decreased 37.6% to 4.7

Local Market Updates:

Golden Valley Condos
There are 46 ACTIVE LISTINGS. There were 7 NEW LISTINGS, 2 PENDING & 3 SOLD last week.

Maple Grove Townhomes
There are 20 ACTIVE LISTINGS. There was 1 NEW LISTING, 1 PENDING & 1 SOLD last week.

Minneapolis Homes
There are 70 ACTIVE LISTINGS. There were 6 NEW LISTINGS, 3 PENDING & 3 SOLD last week.