The Saint Paul Condo Blog

With the President's signature just a little bit ago, the first time buyers' credit has been extended and expanded.  I guess writing letters to Senators actually works ;)

Here's the big news out of the extended/expanded tax credit program...

It's no longer just for first-time homeowners.  If you've lived in your current place for 3 out of the last 5 years, you qualify for a slightly smaller credit of $6,500 - Might make selling at a loss a little more palatable.

The income limits have been upped.  If you are single the new cap is $125,000 (up from $75,000).  For married couples the new cap is $225,000 (up from $150,000).

There's now a purchase cap of $800,000.

 Below is a FAQ put together by the National Association of Realtors.

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If

President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.  The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you're within the phase-out range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a nonnegotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight what he did since 3 years doesn't impact eligibility.

Question: I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?
Answer:  You do not have to close before December 1.  Once the legislation has been signed, it will be as if the Nov 30 date had never existed.  Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

I finally found out what the culprit of the malfunctioning sprinkler head was.  It was not from some individual, so what caused the malfunction?  Old age!  I guess 28 years is the life expectancy of those things!  City Walk is in the process of replacing all of the sprinklers heads in the building at a cost of around $75,000.

So, water leaked from the 24th floor all the way down to the 15th.  Want to take a guess on what the total repair bill was?  They are closing in on $220,000!  What are you thankful for this Thanksgiving?  I bet the home owners at City Walk are thankful for insurance.

With the recent rash of malfunctioning sprinkler heads in downtown, it's time to address the often overlooked insurance that will Cover Your Assets...  It's the HO6 policy - An insurance policy that designed for condo owners.  At its core, it's like glorified renters insurance and it doesn't cost much more - but there's a huge difference...

First off, why is water damage such a nemesis of condo life?

I've talked to buyers before who were worried about the fire department not being able to reach them in case of a fire.  And honestly, I am much more concerned about the amount of water that comes shooting out of the sprinkler head in said fire.  The fire could be extinguished, but the water keeps coming, and it doesn't stop until someone closes the pipe.

Once you have a condo full of water, it doesn't like to stay put.  It starts to move, wanting to find it's way back home in the Mississippi.  Over at Printers Row, the head broke on the 4th floor (which is the top) and traveled all the way down.  City Walk's recent water fiasco, started on the 24th floor, and found it's way down to the 15th.  When the water does this, it doesn't just go straight down - it spreads out like a Christmas tree, creating a cleaning nightmare.

And here's where the expense comes in.  Having a restoration company come to rescue in the middle of the night with a dozen trucks, opening up walls, lifting carpet, etc...  The numbers add quickly.

Here's where the HO6 policy steps in

The HO6 policy has an additional (sometimes optional) rider that will cover your associations insurance deductible.  When a building like City Walk or Printers Row had their issues with water, the deductible will fall on the home owner where the problem started (that shiny coat hook on near the ceiling).  Typically, condo associations keep the deductible high for a few reasons.  First off is to prevent frivolous claims and second is to keep the policy affordable.  At the Pointe of Saint Paul (where I am on the Board of Directors) our policy has a $10,000 deductible and it still runs $60,000+ a year.

So, if the sprinkler head in your condo went off, would you have the $10,000 sitting around?  Also, nearly all associations have the condo docs written that if your unit is damaged from another, you cannot collect from the association.  It's up to you and your own policy.

Sprinkler heads are not the only water enemy to condos either, there's multiple ways to put a hamper on your day.  Here's a few that I've heard of recently.

Undersink water filter burst (condo was vacant at the time).
Overflow on a washer.
Overflow on a dishwasher.
Leak in ceiling.
Water pipe freezing, then bursting.

Did I mention that HO6 policies are cheap?

Hopefully all of this will inspire you to go out and purchase a HO6 policy (if you haven't already.  I know that if my condo is the fault of a large claim against the association, that I am covered.  I also know that my belongings (including that fancy floor I had installed) will be covered as well.

It's a piece of mind that's almost as cheap as a night on the town.

Thanks Mark and David for suggesting a great blog post!

Did I scare ya?  Well, don't be frightened, that's a good thing!  A major stakeholder in the developer of what was once Fitzgerald Park has donated their land to the City of Saint Paul.  There were a few conditions that went with the donation.  1.  The land must always be used as a park (hopefully, this avoids the snafu that was Central Park).  2.  The park shall be named Pedro Park!  (Pronounced Pea-dro)

Crazy enough, people actually balked at item #2.  Not sure why, once the proposed park was relocated to its current location, the name really didn't make any sense.  Before McNally Smith was there (previously Music Tech), the old Science Museum looked like a good candidate to be torn down.  If the building was raised, a park could be added, framed by the Fitzgerald Theater, Fitzgerald Lofts (It was the Shubert building then), and the churches along Cedar street.

The donation of the land comes in anywhere from $2,000,000 to $3,000,000 gift (depending on who you ask), and that will go a long way to help spur construction of Downtown's newest park.  So if you see someone from the Pedro Family, thank them!

Maybe this will give the Penfield project a little shot in the arm...

Donation Agreement     -     City Council Resolution

I'm happy to announce that Saint Paul Home Realty is growing!  We are expanding our office and with that comes a change of scenery!  Our new office will be located in the Gilbert Building on Wacouta (across the street from River Park Lofts & behind Bulldog Lowertown).

We are really excited about the move and hope to be up and running in the new location by the end of the year.

Interesting news just popped today for the Farmers Market Flats development.  The City has decided to take on the role of Developer, and Flannery Construction will continue to build the project.  The 15,000sf market space will still be on the first floor for the new Indoor Farmer's Market, but upstairs will be re-worked as all apartments (I'm sure a future condo conversion will be in its future).

It will be nice to finally see the hole in the ground become something other than a weed pit. 

Updated (11/12/2009 - 3:51pm)

Walking home, I ran across a group of restoration guys that were unloading trucks and walking into the building.  I also spotted a sprinkler repair truck, so I knew a head popped.  I stopped one of the guys and asked what happened.  Sounds like someone busted one of the heads somehow.

If you live in a condo, please please please - treat those sprinkler heads like fine china.  The amount of water that shoots out of those things are unreal!  I always tell people you shouldn't fear a fire in a high-rise - you should fear the sprinkler heads.

I'll try and get an idea of how many units were affected by the water in the morning.

EDIT (11/18/2009) Heard an estimate on the damage today...  $220,000.

Just in case you were confused about what a Bremer is, don't worry it.  It's a bank.  The once controversial sign that was so bright out, neighbors were up in arms has come down.  "Bremer" is now "Bremer Bank".  Hopefully the brightness of the new signs will be toned down.  The old sign was so bright, people at City Walk were able to read a newspaper at night with just the light form the sign.

Here's to a less bright future (snickering)...

OK, maybe that's a bit of a dramatic title, but after Bulldog Lowertown and Barrio find smashing success in Lowertown, in comes another!

I'm going to out on a limb and say that this establishment will specialize in Wine - just a guess though ;).

So with the addition of bin, that leaves 5 restaurants right around Mears Park (4 if you are ignoring LoTo like I am).  I've attached a map, and it's clickable.  Lowertown is showing signs that its the place to be!