Friday, June 18, 2010

Purchase Agreement Cancelled—Understanding Risk of Loss during Minnesota’s Tornado Season

Minnesota’s summer storm season has started. The first big severe weather outbreak of the season walloped Minnesota yesterday. Hail pummeled roofs. Wind tore off siding and snapped trees like toothpicks. Lighting zapped houses causing a variety of damage. And tornados literally moved homes off foundations. From the time we are very young, Minnesotans are taught how extremely important it is to be weather alert during the summer.

Unfortunately, Mother Nature doesn’t care if a homeowner just accepted an offer from a buyer after having their home on the market for weeks on end. No doubt some of the homes damaged in yesterday’s storms will affect homebuyers and sellers with a contract in place.

Picture the following scenario: After months of scouring Anoka County for the perfect place to call home, you wrote an offer on a home in Lino Lakes that was accepted and is scheduled to close in 45 days.

A few weeks prior to the closing, severe storms with straight-line winds blow through Lino Lakes, Centerville and Hugo. Concerned, you drive up to your dream home and see that the picturesque oak trees that gave the home character have been uprooted. Worse yet, one of the huge trees crashed onto the house severely damaging the roof and eaves. You are devastated as this was no longer the home you pictured in your dreams. What happens now?

Risk of Loss is one of those “boiler plate” clauses on page four of the purchase agreement used most often in the State of Minnesota. Being preprinted, some agents and/or their clients will gloss over this clause but it is very important to understand, as is every other line in the document you sign to buy a home.

The highlighted section starting at line 150, clearly states that the risk of loss due to any reason whether an act of God or the acts of vandals will be the responsibility of the seller from the time the purchase agreement is signed until the date of closing. That means if there is a fire or accident the seller is required to bring the home into the condition that it was in at the time the contract was written and signed.

So if that temperamental decade-old dishwasher goes out, the seller is required to repair or replace it. If a deliveryman backs over the mailbox at the end of the driveway, it is the seller who must repair the post and replace with a new box. And if hail leaves dents in the aluminum siding, the seller must make the repair.

Final walkthroughs are essential to ascertain the condition of the home prior to signing the closing documents. But what happens to those irreplaceable picturesque trees that have fallen on the roof? Three weeks prior to a closing, there could be plenty of time for the seller to call their insurance company and have the home repaired. But is it the same house? And more importantly does the buyer still have to buy the home? In a word, no.

The clause goes on to say that in the case where there is substantial damage to the home or property, it is the buyer’s option to cancel or continue with the purchase agreement. In the fallen tree scenario outlined above, which was a real situation that occurred a few summers ago, the landscaping was significantly changed in the eyes of the buyers as the trees could not be replaced. The damage to the home caused an insurance claim that would now be reflected in a
CLUE insurance report that could affect the ability to insure the home. The buyers opted to cancel the contract as was their option in the clause with all earnest money refunded.

Risk of loss comes into play quite often when buying and selling a home. In most cases the repairs are made quickly to both the buyer’s and seller’s satisfaction and the contract will close on time. But when the property sustains significant damage, the buyer has the option of continuing to closing or walking away from the deal. Boilerplate or not, Risk of Loss is an important clause to understand when buying or selling a home.

 Copyright 2010 Teri Eckholm  

Thursday, June 17, 2010

Top 10 Reasons People L♥VE to Call North St Paul, Minnesota HOME!

People love living in North St Paul. And I am not talking about living on the north side of Minnesota's capital city; I am referring to the City of North St Paul, located just EAST of St. Paul Minnesota along Highway 36. It is a quaint little town with a rich history that was founded in 1870 by Henry Castle on the banks of Silver Lake. He named the town's main streets after his children, Henry, Helen, Margaret and Charles. When it incorporated in 1887, 221 people called the Village of North St. Paul home. From those humble beginnings, the town has grown considerably. As of 2008, nearly 12,000 people call the City of North St. Paul, Minnesota home.

Here is a top ten list of reasons why this community is such a great place to live.

#10-Water and Electric. Most cities provide the basic utilities of water and electricity to its residents. But few communities can boast water from five wells drilled deep into the earth for a pure, natural source of drinking water and their own power grid like North St. Paul can!

#9-Local Police and Fire. The City of North St. Paul is proud to have its own police department and volunteer fire department.

#8-Cowern Elementary, Richardson Elementary and North St Paul High School. Go Polars! North St. Paul has two K-5 grade schools and a high school within its borders. Cowern Elementary is located on the south side of 36 at Margaret St and South Ave. While both Richardson Elementary and North High School are located on the north side of 36. Richardson bisects 16th Avenue and North is located along 11th Avenue. All three schools are an integral part of the North St. Paul/Maplewood/Oakdale School District #622.

#7-Silver Lake Park, Beach and Fishing Pier. Many North St. Paul children have learned to swim on brisk summer mornings in the water of Silver Lake , a tradition that continues into today! And few resident can say they have never dropped by the annual Historical Society summer Ice Cream Social for a vanilla cone scooped by a neighbor. Although there are several other parks and playgrounds scattered throughout North St. Paul, Silver Lake is one of the most often visited.

#6-Unique taste treats! Homemade French fries at Village Pizza, Broasted Chicken from Pizza Factory and award winning homemade ice cream from the HomeTown Creamery ice cream shop are just a few of the delectable treats served daily in North St. Paul.

#5-Booya! The fall tradition of the North St. Paul fireman's booya is an experience that no resident of North St Paul can resist! After a night of cooking up a ‘secret recipe'stew in giant pots, the volunteer fire department serves up their brew for all. Whether purchased by the bowl or pot, it is a fall tradition enjoyed by community residents for nearly a century!

#4- Friday Night History Cruz. Love classic cars? Spend a Friday evening in North St. Paul for the History Cruz. Hundreds of car enthusiasts invade the main street of downtown North St. Paul, 7th Avenue, to show off their prized vehicles and see the shiny chrome fenders of yesteryear.

#3-The Snowman. The snowman has been greeting the residents of North St. Paul since it was constructed in the 1970's. It was originally downtown behind what is now K&J Catering, but later moved to a park at the corner of Hwy 36 and Margaret Street. For those keeping statistics, the snowman is 44 feet tall and weighs about 20 tons!

#2-Eclectic Options for Living. Whether you want the convenience of a low-maintenance townhome, a historical turn of the century treasure, a 1950's rambler or bungalow, or a recently constructed, modified two story, you can find an affordable option to rent or purchase in North St Paul.

#1-Friendly People. The number one reason for living in North St Paul is the welcoming community atmosphere. Isn't that what most people search for in a place to call home?

Copyright 2010 Teri Eckholm

Monday, June 14, 2010

Rent or Buy? The Debate Continues…But in Minnesota, Buying is #1!

Earlier this month the real estate web search company Trulia announced a new rent versus buy index. Topping the list of places to buy rather than rent was the Minneapolis market (yes, this means all of the Twin Cities metro). Trulia made the calculation using the listings on comparing the average rent of a 2 bedroom home or condo compared to cost the list price of a similar sized home. Results show that in this market people may come out ahead if they buy rather than rent.

Now combine that information with the first quarter numbers just released from the National Association of REALTORS® showing that the prices in Minneapolis/St. Paul are still down. In the just released
First Quarter Local Market Report for Minneapolis/St. Paul/ Bloomington the trends for the market indicate that nearly all of the equity from the housing boom has been wiped out. Today’s homebuyer has the ability to buy a home at a price not seen since the late 90’s. This IS a huge opportunity for anyone STILL on the fence about buying a Minnesota home.

Should you rent or buy?

There is an awesome website that helps individuals to answer that question. Ginnie Mae is an organization providing that provides the private mortgage insurance to most government (FHA and VA) loans. Their website provides tips, tools and ideas to help out the first time buyer.One helpful tool is their
Rent versus Buy Calculator. It is simple to use: Enter your current rent, the price of the home you are considering, how long you intend to stay at the home and a few other details. The calculator will provide an indication of where you will stand financially if you make the purchase. It is a good tool because it allows you to adjust the estimated property value increase. (In this changed market, it would be best to consider a 0-1% increase. Or consult with a REALTOR® for an estimate for a particular region or neighborhood.)

Copyright 2010 Teri Eckholm

Wednesday, June 9, 2010

Wordless Wednesday (Almost)--Trying to Hide an Elephant?

Kind of hard not to spot this guy isn't it? Sometimes home sellers in an attempt to "stage" their home will try to camouflage the flaws with decorating. Putting a plant in front of a major crack in a wall or positioning a couch over a damaged wood flooring is not the best way to sell a home. It often looks no better than this guy hiding behind the tree. Buyers working with a good REALTOR will see through the smoke screen to the elephant in the room. Best advice is to make a proper repair from the get go!

Copyright 2010 Teri Eckholm 

Thursday, June 3, 2010

Beware of Dangers Lurking in the Underbrush on Minnesota Acreage!

Anoka, Chisago, and Washington Counties in Minnesota boast some of the most beautiful, desirable acreage properties in the state. As a REALTOR® in the Columbus, Ham Lake, Forest Lake and Lino Lakes area, I have to walk acres with my home buyers to assess the land. I walk the perimeter of properties with potential acreage sellers to understand the property lines. Whenever showing homes on Minnesota acreage, I am prepared. There are dangers lurking in the underbrush.

Poison Ivy--Be aware and on the look out for these poisonous plants as they are all over in Minnesota yards and wooded areas. Many property owners don't even realize the plants are poison ivy. Poison ivy is found all over the US while a close relative poison oak is found most often in the west. The plants to have a similar look and exposure to either of these plants will cause a similar, painfully itchy reaction.

Poison Ivy in Summer
  • Classic poison ivy is in full swing
  • Some leaves are notched and some are not
  • New leaves are shiny and still somewhat reddish
  • Older leaves are duller in color
Photo courtesy of
Poison ivy can be a ground cover, a vine or a bush. One small neglected patch can spread very quickly to a huge area. Exposure to this plant is an itchy nightmare that can last for several weeks unless treated with prescription medicines, usually steroids. These plants can leave oil on clothing which can spread in the laundry. Be aware of this hazard when walking in any wooded area that you are unfamiliar with.
Think you know what poison ivy looks like? Take a quick poison ivy PHOTO QUIZ
Wood Ticks/Deer Ticks—While the woods are often a haven for white-tailed deer, the beauty of these animals is overshadowed by a frightening reality. Deer ticks are carriers of Lyme disease; a painful disease that can be quite debilitating if untreated. Deer ticks (or Blacklegged ticks) are rarely found in maintained yards and are very tiny and often not noticed even after having bitten a host. The best defense is prevention of a deer tick bite.
  • Dress Appropriately—When walking acreage with underbrush or on property that has not been maintained, wear long sleeves and tuck in pant legs. Hats are a good idea to keep ticks out of your hair and off your head!
  • Use Bug Spray—Effective repellents include DEET and Permanone. Spray clothing with Permanone repellent prior to wearing as it is not to be sprayed directly on the skin. DEET can be used on clothing and/or skin.
For additional information on ticks commonly found in Minnesota, read article “Ticks and Their Control”, by Jeffery D. Hahn

Of course ticks aren’t the only biting critters on acreage. If walking an acreage property in the evening or near a lake or wetland, I am prepared to ward off
mosquitoes, deer flies and no-see-ems too. Luckily, the advice for ticks, a good bug spray with DEET, a hat and long sleeves, works to a keep bites from these pests to a minimum as well.

Copyright 2010 Teri Eckholm 

Wednesday, June 2, 2010

Wordless Wednesday (Almost) What a Difference a Paint Job Makes!


After lingering for months on the market with many showings but no buyer, my sellers decided to paint the exterior of this home. It sold in less than two weeks after the paint job and replacing the front and back doors. Does staging and updating work to get a sale? You betcha!

Copyright 2010 Teri Eckholm