Key insights

• When debating between a condo and a house, it’s important to consider the pros and cons of both.
• Consider how important it is to have control over upkeep and renovations, especially as they relate to timing and money.
• Think about your current lifestyle and how a home or condo can meet your needs.
• Determine how much you have to spend and if your living situation may change in a few years. Be sure to take all costs into consideration!

You’re thinking of buying, but is it time for a condo or a house? Owning a condo can mean a little less autonomy than owning a single-family home — but for some, less control (and less upkeep) can be a good thing.

Here are the pros and cons associated with property control, lifestyle preferences and your personal timelines as you search for a condo or house. Use these insights to help you determine what style of property will be best for you and your family.

Control of the property

House Pro: When you own a house and the land it sits on, you get to make decisions on upkeep and renovations. You can budget what’s best for you and maintain control over what is fixed, how it’s fixed and when it’s fixed. (One notable exception to this rule: If you live in a housing development of single-family homes with a homeowner’s association (HOA), you may have to abide by some general guidelines related to exterior updates and condition, lawn maintenance and holiday decor).

House Con: If something unexpected happens, no one is going to help you. It’s your sole responsibility, and in some cases, the repairs or renovations may be costly. In order to plan for this, you may have to create and manage a savings account that is meant to be used for emergency repairs (like your furnace going out in January) or long-term maintenance you can anticipate (like new siding).

Condo Pro: When you own a condo, the homeowners’ association, or HOA, manages the repairs and renovations for the complex’s exterior and shared areas. They’re tasked with budgeting the cost of necessary updates in advance, and they use your condo HOA fees to pay for them. This means that if the hallway carpet needs to be replaced or the elevator breaks, it isn’t your sole responsibility to fix it — the HOA will manage the repairs using the fees you and the other unit owners have already paid.

Note: In some cases, the HOA may have to charge a special assessment to pay for large repairs they didn’t plan for or emergencies that can’t be covered by their reserve fund. This means that you may have to pay more than your HOA fees on occasion.

Condo Con: Unless you’re an influential member of the HOA, you won’t get to choose which projects are deemed necessary by the HOA. This means that if there’s an expensive exterior issue that only affects your unit, you may have a harder time convincing the HOA to fix it. And even if a project you want is taken up, you most likely won’t have any say in design, color, material or other aesthetic choices.

Plus, at some point, your fees will likely be used to pay for updates that don’t directly affect you. You may watch from your first-floor unit as the HOA drains the reserve fund for a new roof, or they may decide to add a swanky new fitness room that you’ll never use. This can be frustrating, and the best way to deal with that frustration is to remind yourself that if nothing else, these repairs will help you upon resale of your unit.

Last, it’s important to remember that what happens within the air space of your individual condo unit is your responsibility. For example, if you own a washer and dryer set within your unit and the machines break, you will (typically) still be on the hook to repair or replace them. Some HOAs may cover certain appliances or services within your unit, but condo owners are still homeowners, which means you should anticipate paying for repair and upkeep costs within individually owned units.

Questions to ask yourself:

• Would you like to take on occasional home projects and call the shots about renovations, budgets and upgrades? Is the promise of control worth the time and money you’ll spend maintaining your property?
• Alternatively, would you rather spend minimal time on property updates and facilitating emergency repairs while also relinquishing some of the control over your property?

Lifestyle insights

House Pro: If you’re a renter who is ready to take the plunge into homeownership, you may be excited to have private space that is entirely under your control. Paint a mural, knock down some walls, add a chicken coop in your backyard. Provided you have the money and the motivation (okay, and the permits), the sky’s the limit.

House Con: You’ll quickly find that your new house comes without any built-in amenities and services — and that these bills can add up when you pay for them on your own. Whether it’s paying for a pool or gym membership, or setting up waste and water utilities, owning a home can have some seemingly hidden expenses that can add up if you don’t plan ahead.

Condo Pro: As a condo owner, you can take advantage of many shared amenities without putting any time into them. Enjoy a hot tub soak or pool day without fretting about chlorine testing and draining. Host a summer party on the rooftop garden deck, even though you’ve never tended to the plants or swept the patio. One caveat: The size of your condo development can impact just what the HOA pays for, and what you decide to divide up among condo unit owners. For example, a condo building with only four units may expect the homeowners to take an active role in cleaning shared spaces or completing yard maintenance in order to save money.

And, of course, remember that if your HOA (or the property management company they hire) pays for plowing or offers underground parking, it may be possible for you to make it through an entire Minnesota winter without breaking out your shovel. Can you put a price on that?

Condo Con: Is that upstairs neighbor running laps? Dropping bowling balls on the floor? Grinding forks in their disposal? Sharing space and walls means that you’ll sometimes be inconvenienced by the noise and curious habits of other condo owners, although HOAs often have rules prohibiting excessive noise.

You’ll also be under the watchful eye of your HOA. While your private unit is typically yours to customize, HOAs can have restrictions on everything from the welcome mats you place in the hallway to the grill you hope to keep on your patio. (So yeah, we can almost guarantee your condo-based chicken coop won’t be approved.)

Questions to ask yourself:

• Do you mind living in a communal setting where you can take advantage of shared amenities and services in exchange for making small talk in the elevators and sharing walls?
• Would you prefer to have a fully private space and manage everything from bills and utilities to gym memberships on your own?

Long-term financial considerations

House Pro: A single-family house has the capacity for major repairs or renovations — including the addition of new bedrooms or a wrap-around deck — that can greatly build its appeal and value over time.

House Con: Big renovations like that deck will cost you thousands of dollars, and you may not recoup the entire cost of the project upon resale.

Condo Pro: Whether you’re entering the real estate market for the first time or are a repeat buyer, you’ll likely find that condos are an affordable home option.

Condo Con: While the price of your condo could be less than a single-family home, the condo HOA fees you’ll pay will greatly increase your total spending as a homeowner. Be sure you understand the full cost of owning a condo before buying, which includes:

• Your mortgage principal and interest
• Property taxes
• Homeowner’s insurance
• Condo HOA fees
• Individual unit repairs and upkeep
• Parking fees, if applicable

House Pro: You have the option to rent out your single-family home if you aren't ready to sell — provided that it is permitted by the local government. (Some cities require that homeowners obtain a license before renting their home.)

House Con: Finding renters for larger homes can be difficult, as the price of the rent can be more than a mortgage of a smaller property. And by renting out the home, you likely won't make big property repairs that would increase the value of the home upon resale.

Condo Pro: If you aren’t in a good position to sell your condo, but want to move out, you may be able to rent it out until the property has built up equity. Whether you find a young professional tenant or lease the condo to your child or another family member or friend, renting a condo can be a great alternative to selling.

Condo Con: Some HOAs don’t allow rentals or they have a quota on the number of rentals allowed within the complex at a given time. If you think you may want to rent your condo unit out eventually, check upfront to see if the complex and HOA allow it. And remember that the rules can change during your ownership.

Questions to ask yourself:

• How much do you have to spend, and what are your long-term goals for owning? Are you hoping for a quick payout or a long-term investment?
• If your lifestyle changes or you need a bigger place to go, do you hope to rent the property out?

Key points and next steps

When making the decision to buy a condo or a house, consider the pros and cons of:

• How much property control you want to have, and whether you’re comfortable outsourcing decisions and repairs to an HOA.
• The lifestyle you are hoping for as a homeowner, which includes the special projects you wish to take on and the interactions you’ll have with neighbors in a shared space.
• Your own personal timeline, including how long you plan to stay in the property and if you’ll need the option to rent it out in the future.

If you’re ready to speak with a REALTORⓇ about touring condos or single-family homes in your desired area, reach out. Together, we’ll explore the advantages of each.

Key insights

• 98% of REALTORSⓇ believe curb appeal is key in attracting buyers, and many outdoor home projects have a high return on investment.
• Start with standard lawn care by cleaning up the yard, weeding and removing clutter.
• Keep your yard looking top-notch with consistent landscaping.
• Consider adding or replacing some features to improve the look of your yard and home exterior.
• If you have the time and money, take on a bigger project like adding a patio or outdoor kitchen.

You’re probably familiar with the importance of first impressions, and that goes for your home, too. According to the Remodeling Impact Report: Outdoor Features by the National Association of REALTORSⓇ (NAR), 92% of real estate agents suggest sellers improve their curb appeal before listing their houses and 98% of agents believe curb appeal is important to buyers.

Getting the exterior of your property ready for sale doesn’t necessarily have to cost you lots of money. In fact, with just a few household supplies, time and some elbow grease, you can accomplish many of your landscaping tasks yourself.

Start with a cleanup and lawn care

It may sound obvious, but the first step to getting your landscape open-house ready is to give the space a good declutter and cleanup. This can include:

• Removing toys and tools from the yard.
• Cleaning up any debris, animal excrement and spiderwebs that have accumulated in your outdoor spaces.
• Power washing sidewalks, decks and siding, and giving more delicate areas and furniture a good washing.
• Mowing the lawn and laying fertilizer.
• Pruning trees, shrubs and plants.

Keep in mind that this isn’t a one-time task. Just like your home, you’ll need to keep up and maintain your landscape. Water your grass and flowers, reapply compost or other fertilizer and designate a hidden space like a shed or garage for tools and toys.

If you’re too busy for lawn care, you can always hire out a lawn service company to fertilize and weed your space—according to the NAR report and input from the National Association of Landscape Professionals (NALP), you’ll see a 217% return on investment (ROI) for the costs of standard lawn care.

Act on any landscape maintenance

Now that the space is cleaned up, you’ll have a better sense of what issues stand out and what areas need some extra TLC. Check this list to see what tasks apply to your space:

• Replace any missing sod or fill empty areas with a garden, flowers or decorative grass.
• Reapply mulch or add pebbles.
• Fix or replace any items that have seen better days, like a broken fence segment or burnt-out light bulbs in your sconces.
• Throw out damaged decorative items like planters, welcome mats, bird baths, etc.

While you’re at it, try to think about staging your outside as much as your inside using our curb-appeal checklist. While you might enjoy garden gnomes and wishing wells, your potential buyers may not. Keep your space clean and uncluttered for ultimate exposure. (This includes holiday decor—you’ll be able to set up your inflatable Santa another year.)

Most of these tasks can be done on your own, even if you’re a beginner gardener. But you can also hire a professional to plant your flowers or lay your mulch and enjoy a 104% ROI.

Consider implementing updates and upgrades

If you find areas of your landscaping lacking, smaller improvement projects may be just the thing to give your home’s exterior new life. A few common projects you could undertake:

• Replace uneven walkways or upgrade pebble paths to flagstone ones.
• Repaint or stain any fencing, archways or other structures.
• Switch out plastic planters for more aesthetically pleasing ceramic, stone or terracotta versions.
• Add decorative features such as a bench, swing or patio table, or include small touches like a bird feeder, hanging planters or decorative lighting.
• Plant additional trees, shrubs, decorative grass or flowers.

Pro tip: Go on neighborhood boards and webpages to see if anyone has been splitting plants and is willing to give some to you—it’s a super-cheap (or even free!) way to build out your botanicals. This extends to other landscaping items, too. Look for planters, patio furniture, extra materials like stone, wood and staining, light fixtures and more at estate and garage sales, thrift stores and online forums.

Landscaping professionals can lend you a hand with the more labor-intensive projects and give you valuable insight into what will best highlight your home. The average ROI for services like these is 100%.

Think about adding new features or taking on larger projects

For those who plan to stay in their home for a while, larger landscape initiatives can increase the enjoyment of your home while you get ready for a move.

• Add an outdoor kitchen.
• Install a new patio or deck.
• Get tech-smart with automatic lighting, security and irrigation.
• Create a space for a fire feature.
• Go big with a new in-ground pool.

The ROI for these projects can be lower and most REALTORS would not recommend making these updates before selling, but an overwhelming majority of homeowners who completed these projects reported high amounts of enjoyment.

Seek expert advice before starting any outdoor projects

Real estate demands differ greatly from region to region, so it’s imperative you speak with a licensed real estate agent to learn what landscaping will get you the most bang for your buck in your area. Reach out today for personalized recommendations on increasing your curb appeal.

Key insights

• Water rights are based on various factors, including the state in which the property is located, the type of lake it is on and the legal description of the property itself.
• As a general rule, the adjacent property owners own all the way up to the water. While the public may boat or fish on any lake, they can only do so if there is a public access point to the lake.
• In Minnesota, the lakebed usually depends on the type of lake. In Wisconsin, most lakeshore owners only own up to the water line and the State owns the rest.

Homeownership can be complicated, but we also think it’s one of the most rewarding ventures out there. In our series, Ask an Edina Realty Lawyer, we are hoping to demystify some of the trickier aspects of buying, selling and owning a home.

In this edition, one of our lawyers discusses the water rights of lakefront property owners.

Dear Edina Realty Legal,

I am looking at buying a lakefront property. If I did, would I own the lake, or part of it?

Lawyers hate giving the answer, “It depends.” But water rights are based on various factors, including the state in which the property is located, the type of lake it is on and the legal description of the property itself. So, it depends.

Still, there are some rules of thumb that apply to waterfront properties in Minnesota and Wisconsin. First, the water that makes up the lake is not owned by any individual. Instead, it’s held by the state in trust for the public. If you can legally get to a lake, you can boat on it, for example.

A lot of people think that the states own the shoreline around every lake and the public is allowed to access the lake via this shoreland. This is not true. As a general rule, the adjacent property owners own all the way up to the water. While the public may boat or fish on any lake, they can only do so if there is a public access point to the lake.

It’s important to keep in mind the difference between a lakefront home and one with lake access. A lakefront home is situated directly on the waterfront, while a lake access property offers access to the lake or body of water, but someone else owns the property between it and the water.

What about the lake bed?

In Minnesota, who owns the lake bed, or floor of the lake, usually depends on the type of lake, and falls into one of three categories: navigable, meandered and not navigable/meandered.

Navigable: A “navigable” lake is generally one that was useable for commercial trade purposes back when Minnesota became a state in the 1800s. Not a lot of Minnesota’s many lakes fall into this navigable water category. But for those lakes, the State owns the bed past the low water level. Examples of navigable lakes include Lake Superior and Lake Minnetonka.

Meandered: If a lake is not identified as navigable, but has been “meandered,” that’s different. A “meandered” lake is one that was surveyed and plotted back in the 1800s. Around half of Minnesota’s lakes have been meandered. For those lakes, as long as they are not identified as navigable, the lake bed is owned jointly by all of the property owners around the lake.

Not navigable/meandered: Finally, if a lake is not navigable and not meandered, each adjacent owner generally owns from their shoreline to the middle of the lake. But because lakes don’t come in uniform geometrical shapes, the exact boundaries can be unclear. If a lake dries up, it often takes a court proceeding to allot the newly dried land.

In Wisconsin, it’s a different story. Most lakeshore owners only own up to the water line. The State owns the rest.

Other rights

While the lake-adjacent property owner may or may not own property past the water line, in both Minnesota and Wisconsin, owners have a lot of rights with respect to the usage of the lake, called riparian rights. Riparian rights generally include the right to fish, swim and otherwise use the water, the right to access the property from the water and the right to build a dock, among other things. These riparian rights provide a lot of value to waterfront owners.

Want to buy a lakefront property?

Looking to buy waterfront property? Reach out for assistance.

The Edina Realty Legal Department serves as in-house counsel for Edina Realty and does not represent private clients. This Insight is not intended to provide legal advice.

Key insights

• Losing out on a home to another bid is frustrating, but there are strategies you can deploy to be taken more seriously.
• By re-assessing everything from budget to timeline to location, you may find ways to make a stronger offer.
• Buyers can also re-assess their “must-have” and “nice-to-have” criteria to open up more options in their budget.

Buyers today are feeling the squeeze. Home prices are rising, interest rates have been elevated and, while inventory isn’t as low as it has been in recent years, it’s also not keeping up with buyer demand. Multiple offers on highly sought-after properties remain common, which can make for a frustrating buying process.

Here are the best insights for navigating today’s market as a buyer. Whether you’re just dipping your toes in or have lost in multiple offers a few times, these tips should help you determine the right path forward.

Re-assess your offers

First, go to the sold records of houses you bid on to learn their final price. Along with these concrete numbers, try to remember how many offers were placed on each home and how much you bid (and what you offered in a counteroffer as well).

If you are handy with a spreadsheet, put these numbers into an organized grid and try to determine the average percentage you’ve been off when bidding on houses. Do you tend to bid on properties that have just a few offers or dozens?

Use this conversation to make a future plan. If you’re in the running for the houses you like best, then it may just be a matter of being patient. If you tend to be in the bottom half of offers every time, you may want to adjust your expectations or look to other neighborhoods or cities for houses that better fit your budget.

Offer a flexible timeline

Today’s sellers have a keen advantage in the market… until they sell and have to re-enter the market as a buyer! If you have flexibility in your timeline, you may want to use that to your advantage.

Whether you end up closing in 90 days to allow the seller more time to find their new home, or renting it back to them before you move in, offering more time to the seller can help your offer stand out — even if your monetary bid comes up a bit short.

Rethink your “must-haves”

“It’s pretty common for buyers to have a long list of non-negotiables… until they find a house that just feels right,” said Edina Realty President Sharry Schmid. “Then, suddenly, having laundry in the basement isn’t such a big deal.”

Of course, it’s fine to have standards. But if you have been ultra-picky about the homes you’ll consider, and you’re losing bid after bid, you may want to take stock in the amenities or features you really need.

As an experiment, try touring a few homes that wouldn’t meet your original requirements. Discuss the pros and cons of buying a home with only two garage stalls instead of three, a split-level design, or one that doesn’t have an owner’s suite with an attached bathroom. If you decide to hold strong to your original must-haves, that’s just fine. On the other hand, if you find that you’re willing to make a concession or two, you may just open up a whole new market of possibilities.

Reconsider your down payment, if possible

This will be difficult for many buyers, especially those who have spent years saving up for a down payment. It’s unlikely that you have an extra bank account you haven’t tapped. However, if you’re lucky enough to have family or friends who are willing to provide mortgage gift funds, it may be time to ask for a financial favor. Talk to your mortgage lender for insights on how to legally ask for and access mortgage gift funds.

Alternatively, you can seek down payment assistance. In Minnesota, funding assistance up to $18,000 may be available; in Wisconsin, the maximum assistance amount is 6% of the home’s purchase price.

Consider other home types

While many buyers are looking for single-family homes with a yard and garage, other housing options are available and can offer just as many advantages. Condos and townhomes tend to have lower price points while requiring less maintenance.

Plus, multi-family housing is a lot different than it used to be. Condos are no longer available in only the swankiest parts of downtown Minneapolis and St. Paul; they can also be found in most suburbs and neighborhoods. Townhomes are not only being built in large developments but also in smaller communities near parks, walkable retail and more.

Need help entering the market as a buyer?

It’s a tricky time to buy, but having the right professional on your side can make all the difference. Reach out today to get started with a respected local home specialist.

• The market is great for sellers, but sellers-turned-buyers may have a hard time finding a house in a limited time frame.
• By setting up a plan A, which includes smart budgeting and strategic negotiation, sellers may be able to properly time their home purchase.
• If timing doesn’t align, having a plan B with temporary housing can help sellers minimize stress as they continue their long-term search for the perfect home.

You’ve likely seen the headlines over the last few years — with rising prices and low inventory, it is a great time to sell a home. But this leaves many sellers wondering what happens when they sell their home… and then re-enter the market as buyers?

It’s a good question and one we can work together to answer. First, note that the best way to face today’s imbalanced market is to have a plan A (timing your home sale and home purchase together) and a plan B (selling and then biding your time as you find a house to buy).

Here are some insights on how to do just that.

Aim for plan A: Budget and proceed with confidence

Set a budget for your next home

First, we’ll work to get you pre-approved with a home mortgage consultant. A pre-approval is a lender’s estimate of how much you can afford to buy. Next, we’ll compare your home against recently sold homes in the area to determine its likely sales price. Together, these numbers will allow you to set budget parameters for your future home search.

Take control of the timeline

As a seller today, you hold the advantage. That means you have a few options when it comes to your timeline for closing and moving. Once you’ve listed your home and gotten a solid offer, you can:

• Request a slower closing timeline from your buyer, allowing you more time to find a new property.
• Ask the buyer if you can lease back your home for 1-2 months as you search for a new property. Some buyers may resist this, while others may agree to a quicker closing and later moving date.
• Include a reverse contingency in the purchase agreement, which states that your home sale is contingent upon your purchase of another property in a set timeframe.

However, keep in mind that buyers nationwide searched for an average of 10 weeks before they found the home they purchased in 2024. Even the most understanding buyer may not be willing to wait that long. If you end up in a position where you have a pending home sale, but not a pending home purchase, it’s time to move on to plan B.

Plan B: Have temporary housing available

When you’ve sold your house but haven’t found the right one to move into, consider your transitional housing options. Homebuyers often report that finding an alternative place to stay helps them reduce their stress and focus on their long-term housing needs.

Together, we can come up with a best-case temporary housing plan. This may be:

• Renting a single-family home or townhome on a short-term basis.
• Renting an apartment month-to-month.
• Staying at an “extended stay” hotel or inn, which typically has a kitchen area.
• Staying with friends or family who have extra space.

Remember, you aren’t alone when it comes to determining a plan B. We’ll work together to find your dream home — and a soft (and temporary) place to land even if plan A goes awry.

Need help developing your plan A and plan B?

At Edina Realty, we help hundreds of sellers make important decisions about timing, budgeting and negotiations each and every day. Get in touch today for the help you need with the selling and buying processes.

Key insights

• Whether you plan to sell or stay in your home for years to come, our spring homeowner checklist will help you prepare for the upcoming sunny months.
• After the snow melts, consider hiring someone to check your air conditioning unit, gutters, eaves and roof for any winter damage.
• Spruce up the exterior of your home by power-washing your siding, fixing up your driveway cracks and updating your landscaping.

As the sun begins to shine and the cold is replaced by milder weather, you know it’s time to start your spring cleaning and home maintenance routine. To ensure your home is ready for the warmer months ahead, follow this spring homeowner checklist that covers everything from maximizing your energy savings to updating your landscaping with the latest trends.

Check your systems and energy usage

Before that first 90-degree day hits, you’ll want to check in on your air conditioning unit. Hire a professional to make sure everything is in working order. Alternatively, you can DIY your air conditioning maintenance with these four steps, courtesy of Bob Vila:

• Check the hose connections for leaks.
• Ensure drain pans are draining freely.
• Vacuum dust and debris from the unit and its base.
• Be sure to change your HVAC filter every 1-3 months.

Clean up your gutters, eaves and roof

While it’s ideal to clean your gutters before winter arrives, it’s common for debris to reaccumulate over the winter. Grab your gloves, a bucket, a ladder and a friend (to stabilize that ladder and keep you safe!) if you want to do the dirty work yourself. Of course, you can also hire a professional to do the job.

Spring is also a great time to have your roof inspected and repaired. If you suspect winter snowstorms may have damaged shingles or seals on your roof, now’s the time to set up an appointment with an expert.

Freshen up your landscaping

Is yellowed grass bringing you down? In just a few short weeks, you can bring it back to life again! Follow these simple lawn care tips to save your lawn from the effects of our harsh midwestern winters:

• Rake the lawn to aerate the soil after the ground fully dries out.
• Spread lawn seed in patchy areas.
• Sprinkle water on the seeds weekly until they sprout.
• Aerate the soil three times once new grass appears.

Pressure wash your home’s exterior

Spring cleaning may have you decluttering your home on the inside, but it’s also time to get rid of grime on the exterior of your home. Pressure washing the siding of your home will help it shine after a winter of accumulating dirt, grime and other stains. Hire professionals to do the job, or save money by renting a pressure washer from your local hardware store and trying it out yourself. Remember to:

• Start in a less-noticeable area until you can get the hang of it.
• Try a wide-spray pattern to ensure a consistent outcome.
• Steer clear of windows and hand-wash them another day. (You can also use a low setting, but it may not be worth the risk.)

Pay attention to your garage

Once the outside of your home is ready to go, spend some time organizing your garage. This may be especially necessary if you have extra tools lying around from your spring yard work. Here are some quick tips to approaching garage organization:

• Sort items by category, such as sports, gardening, cleaning, etc.
• Pick all belongings up off of the ground and rehome them in labeled bins.
• Invest in shelving or extra storage containers to create more space. Facebook Marketplace and Craigslist often have great deals on secondhand shelving!

Considering selling?

If you hope to sell in the spring, following this spring homeowner checklist will help you build curb appeal that will draw in local, motivated buyers once you put that sign in the ground. For customized advice on how to renovate your home or price it to sell this spring, get in touch today.

Key insights:

• A lender will issue a pre-approval letter after a thorough analysis of a potential buyer's credit and financial history.
• This pre-approval letter explicitly tells real estate agents and home sellers how much a buyer can responsibly borrow in a home mortgage loan.
• Pre-approvals can help buyers in negotiations, because they show that the buyer is prepared and qualified to purchase a home in a certain budget.

Did you know that you can gain a distinct advantage over other homebuyers by arranging for financing even before you put an offer on a home? Read on for more insights on how a pre-approval can help you compete in a tight market.

What is a pre-approval?

As a homebuyer, you may have heard of getting pre-qualified or pre-approved for a mortgage. In a pre-qualification, a would-be buyer submits their financial and credit information to a home mortgage company (also called a lender). The lender quickly analyzes what was provided and estimates the total loan amount for which that buyer would likely qualify. Importantly, the lender does not verify that the submitted information is accurate.

A pre-approval is a more official and involved process where the lender does verify credit information and financial documents provided by the potential buyer. These documents include, but are not limited to:

• Income verification (pay stubs)
• Employment W2s
• Previous year's tax returns
• Bank statements
• A full credit report

After reviewing and verifying this information, the lender can issue a pre-approval letter. This pre-approval letter explicitly tells the buyer, real estate agents and home sellers how much that buyer is eligible to borrow — and states that they have acceptable credit to be approved for a home mortgage loan in that amount.

As you may expect, a mortgage pre-approval is considered more trustworthy than a mortgage pre-qualification.

Is a pre-approval a guarantee?

Your pre-approval letter is based on the information you provided the lender at a certain point in time. If you were to lose a significant amount of money or damage your credit shortly after your pre-approval was issued, you may no longer be approved for that amount when it comes time to buy.

For this reason, a pre-approval letter cannot be considered a guarantee that you will be approved for a loan.

How can a pre-approval boost my negotiating power?

The goal of everyone involved in a real estate transaction – from the buyers and sellers to the real estate agents working with them – is to close the deal effectively and with minimal mishaps.

A pre-approval shows that you are not only prepared to apply for a loan, you are also considered to be a responsible loan applicant by your preferred lender. This can give you an edge over buyers who have not been pre-approved and could help sway the sale in your favor if a seller is reviewing multiple offers with similar terms. A pre-approved buyer presents less risk of being declined for a loan than a buyer who has not undergone that extensive process.

Ready to get pre-approved?

Together, we can ensure you are fully prepared for buying a home by working to get your pre-approval letter. From there, we can have an honest conversation about your buying power and potential path forward.

Reach out today to get started on the buying process.

Prosperity Home Mortgage is an affiliate of Edina Realty. See Affiliated Business Arrangement Disclosure Statement

Key insights:

• When you sell your home, you’ll need to determine if you owe the IRS any of the profits from the home sale.
• For primary residences, capital gains taxes will be charged if your profits exceed $250,000 (as an individual tax filer) or $500,000 (as a couple filing jointly).
• Those who own vacation home properties or investment properties typically have to pay capital gains taxes from their total home sale profit.

If you’ve sold your home in the last tax year, there could be tax implications for you to consider this spring. Here are insights you can use to determine how your home sale will factor into your tax payments.

Capital gains taxes on your home sale

After you sell your home, you may worry about having to pay capital gains taxes, which is when the IRS charges a levy on the profit of your home sale. Keep in mind that if the home you sold was your primary residence for two or more years*, you will only be charged capital gains taxes on:

• Profits exceeding $250,000 if you are filing solo or a couple filing separately.
• Profits exceeding $500,000 if you are filing jointly.

For example, if you are filing your taxes solo and you have just sold your primary residence for $750,000 after paying $525,000 for it, the profit from the sale would be $225,000. That’s a tax-free gain! However, if you sold the same home for $800,000, then your profit would be $275,000. The first $250,000 would be tax-free, and you would be taxed on the remaining $25,000.

In both Minnesota and Wisconsin, it’s quite common for home sellers to earn a tidy profit on their home sale and still not meet the threshold that would require them to pay capital gains taxes.

*Note: The IRS’ fine print says that property owners looking to qualify for this exclusion must have owned the property for at least two of the last five years; have lived in the home for two of the last five years; and have not taken advantage of the capital gain exclusion from the sale of another property in the last two years.

Raising your cost basis to lower your capital gain

As you now know, the capital gain of a home is typically assessed by comparing the price you paid for your home (the cost basis) to its final sales price. However, if you’ve made significant improvements to the property, you may be able to adjust your cost basis.

If you’ve replaced the windows and finished the basement, be sure to tell your tax professional about the cost of those repairs so they can adjust your cost basis. By increasing the price you’ve paid into your home, you’ll decrease the total capital gains on the property.

However, note that the IRS doesn’t count basic upkeep — like hiring a plumber to sweep the drains or adding new carpet — as eligible home improvements for adjusting your cost basis. They require the improvements to be more significant, such as a full basement remodel, replacing a plumbing system or adding a deck or bedroom to the property.

Considerations for second-home owners

The IRS has set up this threshold on capital gains taxes to assist homeowners who are selling their own primary residences. They do not offer similar accommodations to those selling a vacation home or investment property, which means that when you choose to offload a second or third home, you will likely face a higher tax burden than if you were to sell your primary residence.

Some homeowners choose to move into their investment or vacation property for two years before selling, to minimize the total tax payment they will make to the IRS after their home transaction is complete.

Prepping to sell?

If you still own your home and feel ready to make a change, get in touch for help. Together, we can ensure you have a successful home sale.

Key insights

• An inspection can help homebuyers determine the potential damages or defects present in the home they wish to purchase.
• By asking for recommendations and checking references, you can ensure you get a thorough and neutral inspector.
• A long inspection report doesn’t necessarily mean you should walk away from the sale. Together, we can determine the smartest next steps.

When buying a home, it’s smart to require a home inspection within your offer. This can help ensure that you enter into homeownership with a true understanding of the property’s condition and the future repairs it may require. Depending on the outcome of the inspection report, you may also be able to renegotiate the terms of your contract.

To ensure you understand the home's condition and potential issues, projects or repairs, follow these home inspection insights.

How to hire the right home inspector

When hiring a home inspector, make sure you find one who is reputable and experienced. Ask for recommendations from folks you trust and once you begin speaking with potential inspectors, be sure to ask specific questions about their work, plus review home inspection reports they provide and check past client references.

Finally, pay close attention to their expertise to ensure it matches the home in question. (An inspector who specializes in historic homes will not be the right fit if you’re looking at properties in a brand-new development.)

What to expect and what to avoid during the inspection

A normal inspection typically lasts between two to three hours. During the inspection, it’s appropriate to be present and ask questions you may have about common maintenance, concerning appliances or other issues you’ve noticed. If you can’t be there for the entire inspection, return to the property as they’re wrapping up to get a high-level report of the initial findings.

The inspector will review a property's key exterior components, including the house's roof, garage and foundation. In doing so, they are looking for defects and failures — missing shingles or cracks in gutters could result in roof damage, while an unsettled or shifting foundation could mean an expensive structural repair is in your future.

Inside, the inspector will check important systems that could be costly to repair or replace. If your soon-to-be home has leaks or water pressure problems, the inspector will look deeper into the home’s plumbing. They will also look into wiring and electrical systems to ensure there aren’t fire safety issues, and test ventilation and appliances throughout the home.

Making sense of the inspection findings

After the inspection is complete, you’ll receive a detailed home inspection report. A typical report can span 20-50 pages.

A longer report doesn’t necessarily mean the house you’ve selected is a money pit; it could be an indication of a thorough inspector who has identified many smaller issues that can be used as leverage in your negotiation.

Together, we will review the report in full and determine how to proceed. Only then can we decide our next steps, which may include:

• Asking the seller to pay for smaller fixes, such as a broken window or missing gutter.
• Requesting a price reduction or money back at closing, in recognition of more extensive issues that will need fixing in the near-term — such as an aging roof or windows with insulation issues.
• Walking away from the property if the identified problems are too extensive or if the seller is unwilling to drop their price or pay for repairs.

Remember, your inspector is a neutral partner

In addition to their inspection report, some inspectors may offer to share an estimated cost of necessary repairs. This can be helpful as you make your home purchase decision. After all, you’re likely not an expert on how much a few broken roof tiles will cost.

Keep in mind, however, that you want to avoid working with an inspector who offers to perform repairs or recommend contractors. Your inspector is an impartial mediator, so they should have no stake in your home purchase or the services that will be needed as a result of their work.

Need someone to help you every step of the way?

When buying a home, it’s critical to work with someone you can trust. Whether you’re ready to put in an offer and request an inspection or need help finding the right neighborhood for your family, reach out today for dedicated assistance.

Key Insights

• Moving to a smaller home - or downsizing - is a process best accomplished over time
• There are steps and resources available to help you navigate the emotional and practical sides of downsizing
• Even if you don’t plan to move, downsizing your belongings can give your home new life

There are many reasons why people decide to move, and downsizing is one of the most common. Whether you’re an empty nester in a new season of life or you just want less stuff, these tips will help you navigate the emotional and practical aspects of downsizing your home. And when it comes time to sell, having a home that showcases your (neat and tidy) storage areas can be a major selling point!

Top reasons to downsize

If you’re considering a move in 2025 or beyond, you might be looking at reducing expenses and space. Here are popular reasons for downsizing:

1. Cost savings. Electing to take advantage of existing equity and trade in a large monthly payment for a less expensive home can be an attractive option for those looking to reduce or eliminate monthly mortgage payments and unnecessary utilities.
2. Reducing maintenance and space. Larger properties take more time to clean and maintain, so wanting to maximize your leisure time is an admirable reason to move. Furthermore, having a lot of unused space is impractical.
3. Moving near family and friends. Whether you’re hoping to be closer to the grandkids or the golf course, proximity to loved ones is a major motivator. And some are choosing to settle in communities organized around lifestyle and age.

Tips for downsizing

Chances are, you’ve been in your home for a while and will have to confront the emotional and practical aspects of making the move. Here are some tips for navigating the process of downsizing:

• Give yourself plenty of time. It’s not fair to think you can go through decades’ worth of keepsakes, furniture and decor in a couple of weeks. Give yourself a few months to tackle this, and ask for help from family and friends. You may also consider holding an estate or garage sale.
• Make a plan for trash and donations. You’ll likely want to check with your trash hauler about expanding your services. Some downsizers prefer to rent a dumpster or make arrangements with a local junk hauling company to take unwanted items away. To stay organized, create zones in your home for what you’ll keep, toss and donate.
• Pass on the good memories. Invite your kids, nieces, nephews or grandchildren over on a Saturday to sift through family relics and memory boxes. Tell your family in advance that they are welcome to keep anything they'd like, but items left behind will be recycled or trashed. Pro tip: Consider buying large plastic storage containers for each family member to fill up. This will reassure them that you don't want to trash their memories, you just want them to find a new home.
• Shred or recycle papers. You likely have a file cabinet full of pay stubs, tax reports, immunization records, newspaper clippings and more. Take a day (or two) to go through all your paperwork, and try to discard the majority of it. The IRS says that even the most complicated tax filings must only be kept for seven years, so clear out anything older than that. Protect against identity theft by shredding all the documents with personal information, but keep in mind that shredded paper cannot typically be recycled.
• Pare down items. Save your bathrooms and kitchen for a day when you don't have the heart to throw away sentimental items. If you have specific kitchen-related traditions, like baking spritz cookies during the holidays, consider whether a relative might like to continue the tradition, and pass your items along to them.
• Discard clothing you haven’t worn in two years. With very few exceptions, you should get rid of any clothing items you haven't worn in the last two years. If you recently retired, consider donating the majority of your suits and work outfits to an organization such as Dress for Success.
• Try to stick to the “OHIO” rule. For efficiency, it’s often recommended that you “only handle it once” when deciding which items to keep, toss or donate. While this is a nice idea, it may not always be practical. Perhaps a revised goal can be to make a pile of things you need to revisit so that you can move the process along and come back to the outliers later.
• Save the furniture for last. Unless you know you need to get rid of multiple bedroom sets, wait until you find a new home to narrow your furniture selection down. Then, you can decide if you want to fill your new living space with your formal living room setup or your casual den couch and loveseat. Remember, too, that you don't have to bring any of it with you. Downsizing is a great time to start fresh with modern couches, chairs and tables that suit your new home and your changing tastes.

Taking the next step

Whether you're upsizing or downsizing, we can work together every step of the way to keep you moving forward. Reach out to get started.