Sunday, November 20, 2011

Buying a Home Soon? A Good Credit Score Will Save You MONEY!

Thinking of  buying  a house soon? You know you your credit report and FICO Score will affect your new home purchase, but did you ever think of how much an affect it has? I was reading an article by a fellow REALTOR® today who pointed out that a 20-40 point lower credit score will mean you will be paying quite a bit more in closing costs than someone who's FICO score is a bit higher. That is SERIOUS money out of your pocket!

When buying a first home, it is imperative to keep your closing costs as low as possible. That way you can have money in reserve for any repairs, updates and expenses that will come with home ownership. Being aware of your credit score and how it affects the cost of a loan could save you thousands.

Copyright 2011

Monday, November 14, 2011

Hey Anoka County Homebuyers! Do you Have your Eye on a Real Estate SLEEPER?

You check the MLS link every day and there it is...sitting on the market day after day. It's your dream home and you have watched it for a couple of months now. It seems to be priced right; in fact, it is a steal of a deal. But the market has you paralyzed into watching and waiting rather than making your move on the perfect home so there you are on the fence still waiting until that perfect moment to call up a REALTOR® and put in your offer on your dream. As you continue to "time the market", waiting to see if seller of that “sleeper” is going to drop the price again, you may be missing out. It is time to WAKE UP! Because, you might not be the only one with an eye on that sleeper and if you wait too long it will be gone.

A real estate “sleeper” is a home that is an amazing deal but few people, if anyone, is paying attention to it. Usually it is a great property, location, structurally sound and priced well but has not sold. In a buyer’s market where there is significant home inventory but few buyers, sleepers are abundant.

Maybe the home was originally over priced and though it is now priced very well it is being overlooked because of high days on the market statistics.

Possibly several very similar homes went on the market at the same time and in the same condition. Picture for a second, three homes listed during the same week in a cookie-cutter development where all the homes have roughly the same floor plan. All the homes are the same age, condition, and priced very well, but only one homebuyer comes through the neighborhood during the next two months. So after 60 days, there are two sleepers left that didn’t sell. Since the houses are essentially the same as the neighboring home that sold, it's not that the homes aren't properly priced. This is another scenario that will cause a sleeper in this changed market.

And then some great homes are "sleeping" on the market because…well, there is just so much darned inventory out there!

But if you are sitting on the sidelines and just watching your perfect home for another price reduction, beware. I have sold a couple of sleepers this past year throughout Anoka, Ramsey and Washington Counties. In each case, nothing was happening on the property then BAM....we had 2-3 qualified parties interested in the home at the same time. In these particular cases, they weren’t the cookie-cutter variety either. One home in Ramsey County in the White Bear Lake/Vadnais Heights area in an ideal location. After months on the market, there were suddenly two offers in one day! Agents and clients were nonchalant when I told stressed that the home had recently seen a sudden surge of interest. Many even “pooh-poohed” the idea and mildly accused me of trying to get them of trying to coerce an offer. When the first offer came in, the seller wasted no time in accepting and I had several parties, buyers and agents alike, shocked, and more than a little miffed, that it was suddenly sold!

If the sleeper phenomena had happened only one time this past year, I would consider it a fluke but I have experienced this situation on homes in Washington and Anoka Counties as well. In some cases I was the listing agent and others I was representing buyers.

So homebuyers heed my warning, if you are on the fence watching a sleeper that is currently listed, now might be the perfect time to make your move...Contact your REALTOR® for a showing, make sure you have your pre-approval from your loan officer ready to go and make your move! Or someone else might beat you to it!


Friday, November 11, 2011

My First Question to a HOME BUYER--"Have YOU Talked to a Loan Officer?"

"Hello, this is Teri!"

"Hi Teri! I saw your ad for the home you have listed on 2 acres in Anoka County and would like to set up a showing."

"That is a nice home and it is still available but I have a few questions for you before I can show the home. Are you working currently working with a REALTOR®? No? Well, have you talked to a loan officer yet? "

That is how I begin almost every single conversation with a potential buyer. Have you talked to a loan officer yet? Okay...I realize it is my second question but it is the first real question regarding the buying process. See, there often is no point in setting up a showing on a home unless you have spoken to a loan officer. And this is not just about credit issues and ability to purchase either. You've no doubt heard the proverb about not putting the cart in front of the horse...which means don't get ahead of yourself. You as a home buyer need to understand type of loan you will be using, what payment you would be comfortable making and, yes, whether you have enough income and suitable credit score to get the loan. If you do not know these very important specifics on your home loan, there maybe no point in seeing the property.

An experienced FHA loan officer and blogger, Jeff Belonger, recently wrote a post about what REALTORS® need to know about specific loans in order for the deal to go through.  It is an interesting read that got me thinking about the home buying process and where it really starts. I do know that there are requirements for the sale of an FHA appraisal that would prevent me from showing most foreclosure homes to an FHA buyer. So for instance if a listing  I have is an as-is estate or foreclosed home that needs a  new roof,  but the seller refuses to replace, I know buyers that plan to use an FHA mortgage, will not be able to purchase the home. But if you haven't talked with a loan officer yet, you as a buyer will have no idea whether the type of mortgage you will use will work with the home.

So the conversation with myself and the potential buyer usually continues with the following:

"I would be happy to show you the home as soon as you have met with a loan officer to be pre-approved for a loan. That way, you will know what type of financing you will be using and if the payment is something that will work with your budget. I would be happy to refer you to a loan officer that would be able to assist you."

Please don't think that requesting you speak with a loan officer first is to putting  off showing you a home. This is really about "putting the horse in front of the cart" rather than the other way around. No buyer ever wants to be looking at homes they cannot afford. Knowing what price point for a home is considered affordable to your budget and the type of loan you will be getting will make the home buying process smooth and relatively stress-free!


Sunday, November 6, 2011

Holiday Tips for Homesellers—House On the Market for Thanksgiving & Christmas?

The calendar says November and that first snow fall will be blowing in soon. It won't be long before the holidays are upon us. So if your home is currently on the market and has yet to sell or if you just got a job offer out of state and need to list your home, what should a seller do?

At first inclination most sellers opt to withdraw their home from the market believing that the preoccupation with the holiday season puts few buyers in the market. While there is a grain of truth to this, sellers can be ignoring another more important situation: Any buyer looking at houses during the holidays  will be VERY serious buyers. 
There are not many tire-kickers running around with a REALTOR® when there are dinners to plan, cookies to bake, and gifts to wrap. November, December and January showings are an opportunity for a traditional seller. Most homes that buyers visit at this time of the year are vacant. A buyer’s choices are down to model homes, empty relocation properties and foreclosures. A welcome home filled with the colorful sights, delightful sounds and wonderful aromas of the season, give a unique opportunity for those wanting to sell.

Tips for Showing & Selling During the Holidays
  1. Decorate! Tastefully of course. This might not be the year that you do the Griswold display of lights as in National Lampoon’s Christmas Vacation, but a decorated tree, candles and wreaths can add a special touch.
  2. Bake and leave out Christmas Cookies. Why should Santa have all of the extra calories?
  3. Make sure the fireplace is burning bright, warm and welcoming!
  4. Play holiday music. Leave out the barking version of Jingle Bells and go for instrumentals or uniquely Minnesota regional artists like The Blenders.
  5. Shovel and salt the driveway if necessary. No one wants to spend the holidays in the emergency room with a twisted ankle.
  6. Turn the heat up for showings…Let them know the furnace really works. It is such a treat after visiting vacant foreclosed homes!
  7. Leave the front light on! Don’t forget it is dark out during those early evening showings. Make certain buyers and their agents are able to see their way to your front door and be able to open the lockbox.


Tuesday, November 1, 2011

REALTOR® Selection 101—How to Choose the BEST REALTOR® for YOU! (Part Two of Two)

How does the average home buyer or seller find their REALTOR®? Did they meet a friendly person hosting an open house? Call their best friend's brother who just got licensed? Answer an ad on Craigslist? I don't know the percentages but I am certain that most home buyers don't spend any more time researching their real estate agent than they do their groceries. But a home is not an everyday purchase; it is too big of a decision to not have sound advice. So how does one select a good REALTOR® to work with?

The average American will buy or sell property only 2-3 times during their lifetime. It is imperative to have a logical process to select a real estate agent. Purchasing and selling a home for your family is a very emotional situation. If you chose an agent wisely, you will be confident that your REALTOR® is on your side through the entire purchase and/or sale even when your emotions are running high.

As a REALTOR® working in the Twin Cities north metro, I love assisting people to find the perfect home. Many of my clients come from the referrals of past clients but I also meet home buyers at open houses and through various marketing avenues. When I meet a potential client, I expect questions about myself and my business. I answer additional questions about living on acreage, wetlands and lakeshore. I field questions on properties in Anoka, Washington and Ramsey Counties. Sometime the questions are about specifics of homes the buyer is interested in and often the questions are about the real estate market in general. But unfortunately not all of these potential clients ask pertinent questions. Some are already be caught up in the emotional buying process of a major life change.

Here is a great step-by-step approach to selecting the perfect REALTOR® for you. This is Part two of a two part article. In Part One, I discussed how to mentally prepare yourself  for your meeting with potential real estate agents. (To read Part One, CLICK HERE.) in Part two I am going to outline specific questions you can ask of potential agents to help you make a better decision on which one will be the best partner in your home search.

Six questions to ask a potential agent

Do you have an introductory flyer or personal resume that you could send me prior to our meeting?
The way an agent promotes him/herself will give you a good idea of their professionalism. If you receive high quality, well thought out marketing materials in the mail within the next day or two (or immediately via email), the agent is on the ball. A well written, professional personal brochure should be part of a REALTOR®’s marketing materials. If you receive something of less quality or nothing at all, the agent might not be able to pay attention to detail throughout the transaction.

Do you work independently or as part of a team?

And, if the agent is part of a team, ask for more specifics, (i.e. If you are part of a team, who will I be working with most often?)

If you prefer to have someone who can immediately answer the phone and track down an answer, you might like working with an agent that is part of a team. But it is important to understand how the team operates. Some teams will operate with the agents being interchangeable where you will have one agent showing you homes to buy, one agent handling listing your home, and another holding the open houses. Often teams will have unlicensed assistance handling the incoming phone calls. An unlicensed assistant, while often friendly can't always answer specifics on a property or show a house.

If you want to work with the same person throughout the transaction, you may prefer an agent that works independently. Often when you call their office, the agent will pick up the phone. They handle all the details throughout the transaction and can answer your questions directly without waiting to contact another source.

Can you give me the names of past clients?

An experienced REALTOR® will have worked with any number of clients and will be able to provide you with a list of previous clients that you can contact as references. When talking with the references, it would be a good idea to ask if they had any problems during the transaction. If they did, ask how quickly and professionally they were resolved. Also ask how they met their agent. If the agent gives you only a list family members, a list of best friends from high school or no list at all, it may be concerning.

(For Buyers) Can You Help Me Understand My Financing Options?

If you are pre-approved for a mortgage but do not understand the financing paperwork after meeting with your loan officer, a good real estate agent should be able to peruse the documents to note any fees that do not seem correct. Sometimes a phone call by a REALTOR® to the loan officer on your behalf can resolve the issue. If not, most real estate agents have several good mortgage professionals that they have developed professional relationships with they can call upon. It could be in your best interest to visit with another loan officer to verify that all fees charged are necessary and that you are in the best type of loan program for your situation. Any real estate agent unable or unwilling to assist you in finding the tools to understanding your financing options might not be the best choice.

(For Sellers) What is your listings-to-sales ratio?

Some agents seem to have every house on the block or every house in a neighborhood listed. You see their signs in yards throughout the town. Their ads are in your local newspaper and in your mailbox. This is may be an indication of a successful REALTOR®. But the big question is “Did the homes sell?” In this slower buyer’s market, there are many more homes on the market than buyers. Do you want an agent that can successfully get you to list your home or one who will actually help you price and market it properly to get the home sold? If the agent is unsure of their ratio, you can figure it out for them. Ask how many homes they listed last year. Then ask how many listings they sold. (Make sure that the agent doesn’t include sales of homes where they represented the buyers.) Divide the listings sold by the total number of listings to get the ratio. If the ratio of listings-to-sales is less than 30-40%, you might want to select a different agent. Successful agents won’t sell every home they list, but their success ratio will be over 50%, even in a slow year.

(For Sellers) How will you market my home?

A comprehensive marketing plan should be prepared for your specific home prior to signing any contract. Good agents establish a marketing plan for each home they list. Your REALTOR® should provide you with a list of how they intend to market your home. They should outline what websites your home will be promoted on and the timing schedule of updated online ads. If there is going to be a sign in your yard, your agent should tell you whether their will be a brochure box with flyers for potential buyers driving by. Anything from the number of pictures in the MLS or whether there will be a virtual tour, open house or print advertising should be discussed and outlined.