Sunday, January 29, 2012

First Time Buyer Question—Is a Buying a Home a Good Investment in 2012?

Is Buying a Home a Good Investment?


“Is buying a home really a good investment?" Great question huh? Especially in this slowly stabilizing economy. For decades buying a home was for decades regarded one of the safest investments a person could make; the epitome of the American Dream. But now first time buyers are confused as home values and average sales prices plummeted. Is the real estate market current downturn a opportunity to grab one's piece of the American Dream? Does owning a home make sense as a financial investment?



MOST AMERICANS say YES! In a January 2012 survey of voters by the National Association of Home Builders, "74 percent said that despite the ups and downs in the housing market, owning a home is the best long-term investment they can make." That is 3 out of 4 voting Americans who still believe in the value of home ownership!

And I agree,  buying a home is a wise investment and not just because I am a REALTOR®, but because I, too, am a homeowner. The key is to treat your home like an investment. It takes discipline and time for an investment to grow. And like any other investment, if you have to sell a stocks, mutual funds or a home, when the market is down, there is a chance that you will not realize as much profit as you may have expected.

So what are some of the key points that must be considered when investing in your first home?

  • Buy Smart
**Price **Interest Rate **Type of Mortgage **Resale Potential **Equity Builder?
  • Maintain and Protect Your Investment
**Home maintenance **Insurance
  • Don’t Put in Your Asset in Jeopardy
The best way to have a healthy balance sheet when you decide to sell your home is to Buy Smart in the first place. Buying smart is not just about getting the home at an extremely low price. With many homes at rock bottom prices, it is a good time to consider buying a first home. But buying smart also means getting a mortgage that you can afford. One that is safe, preferably at a fixed rate rather than an adjustable rate, that won't fluctuate into something that you cannot afford. Interest rates are at record-breaking low rates. Talking to a knowledgable loan officer is a great way to get started in the home buying process and find out what options are available to first time buyers now.

But buying smart goes beyond the price paid and the loan used to finance a first home. It is also buying with resale in mind. Many, who purchased homes in the price climbing frenzy of a few years ago, snatched up any home they could after submitting multiple purchase agreements on several homes. They often overlooked an unusual floor plan or that the home was railroad tracks with several trains passing by at all times of the day and night. They adjusted their needs to accept the powerlines in the backyard or the noise from Interstate 35 just a few blocks away. But now if these same families are faced with trying to relocate, they are frustrated that buyers refuse to compromise on same aspects that they overlooked.



As a REALTOR® who loves to work with first time home buyers, I spend time helping my them to understand the positives and negatives of the location of each property we view. I point out how something quirky like having no basement or having a hot tub built in to a bedroom could affect the resale value by limiting potential buyers. Paint and wallpaper can be easily changed but foundation, plumbing and property location are much more expensive to deal with. Oddities it a home can drastically affect value when it is time to sell.

Lastly, buy smart by determining whether equity can be increase with good old fashioned hard work! If the home hasn’t been updated, a good sprucing up could raise its value. A house that has an unfinished basement, could build equity if it can be done at a reasonable cost. Don’t take shortcuts and avoid permitting because that can be costly if you go to sell. Is gardening your hobby? Look for a home with a yard that can be upgraded over the years. Just be frugal and realistic in what your resale will be in the end.

Beyond a smart buy, maintenance is essential as is proper insurance to be certain a home owner can afford the required repairs should the unexpected happen. Time after time I have to bear the bad news when presenting a market analysis at a home where the interior and/or exterior has not been repaired or replaced in decades. These homes are not worth what a neighboring, updated home is worth. Doing several projects over time allows a homeowner to enjoy the improvements while retaining the property value. Likewise, not insuring a home properly can be a huge risk. Worse yet, are the homeowners that make a home insurance claim and receiving payment for a repair but opt to use the money for something else.

Finally, it is important for a homebuyer to not put their investment in jeopardy. Many of the people who lost their homes in the market downturn put their homes in jeopardy but taking risky loans against the equity. Some people took home equity loans at reasonable rates but didn’t use the funds to improve their home. Some of these loans were at very high adjustable rates and as the payment rose, the homeowners just couldn’t make the payment. When I was growing up, I remember learning to never take a risk with anything you couldn’t afford to lose. I think a home falls into this category.

Like any investment, a home’s value will fluctuate. But a house is unique as an investment because it serves a dual purpose: It is a your place to live as well as a way to increase your net worth. By using the money that would be paid for rent and putting it toward a house you can afford with a plan to protect and maintain your property, a home purchase is still a good investment. 
If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of RE/MAX Specialists, a call or visit my website for a FREE Relocation Packet or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
Copyright 2012 www.terieckholm.com

Saturday, January 28, 2012

Our Wimpy Winter is the PERFECT Time to Trim Your Oaks!


Are you totally loving the lack of snow this very wimpy Minnesota winter has brought us so far? We have been blessed this winter with a lack of snow (or cursed if you are into snowmobiling and/or cross country skiing). Our roughly 15 inches of snow has meant that roofs are not sporting 3 foot icicles and there is parking on both sides of city streets. People aren’t breaking their backs shoveling or wallets paying for a new snow blower if the old one stops running. Yes, this wimpy winter is a blessing in many regards.

A less though of perk of the lack of snow cover means that it will be easier to trim your oak trees this winter. Oak wilt is devastating to trees in Anoka and Chisago counties as massive oaks are destroyed when this disease spreads. Smart landscaping and maintenance requires you trim oaks in the winter months—before April in Minnesota. Now is the perfect time to avoid exposure to this tree-killing disease and without the normal ice and snow of a Minnesota winter it will be much easier to maneuver ladders and equipment to reach trees on acreage properties.

Oak Wilt Devastates Acreage A few years ago I shared photos of a property in a Ham Lake community where the owners had dealt with oak wilt on their acreage property for several years. Or, more accurately, they chose not to deal with it.  In one summer alone, this property lost nearly a dozen trees. (Read Oak Wilt—A Minnesota Tragedy) While the beautiful thicket of mature oak trees is now a memory, new  property owners took the initiative to save the remaining oaks. I am happy to report that with treatment and proper care, they have lost only one small tree in the past five years.

Oak wilt is not just a problem in Ham Lake and Anoka County. It is prevalent in communities from Columbus to Lino Lakes and Forest Lake to Scandia. Whether you live in Anoka, Chisago or Washington County, if you have oaks on your property, you need to take precautions to protect them from this deadly tree-killing disease.

What is Oak Wilt?

Oak wilt is a disease caused by a fungus which attacks the central system of the tree from the roots to leaves.  When the tree attempts to block the fungus, it also blocks all water and nutrients to the branches and leaves. The leaves then wilt, brown and eventually, the tree dies.

Oak wilt spreads through the root systems of near by infected trees and by fungus beetles that carry the oak wilt spores from tree to tree. For additional information on oak wilt from the University of MN Extention Service CLICK HERE.

How to Protect Your Trees

Keep oaks trimmed and healthy. Trim large mature oaks now as January/February are excellent months to prune oak trees.  If you have your large oaks trimmed now it is a preventative to spring storm damage when heavy, dead branches can fall during tornados or straight line winds.

The fungus beetles infect trees that have been recently injured or trimmed. These beetles are very active in the spring and summer months but not active at all during the winter. Oaks should be protected from damage and not trimmed from April through July.

Tree trimming of mature oaks is best left to professionals especially near the power lines. The trimmer should use a bucket truck or a line/pulley system, NOT spiked climbing boots which can damage the tree.

Selling a Home with Oak Wilt?

Be honest and disclose!  A seller might be tempted to cut down a diseased tree and not say a word to a new buyer. This is not only unethical it could cause expensive legal problems after the sale. Even if a seller doesn’t say anything about oak wilt infected trees that were removed prior to listing the home, most neighbors will. Cutting a tree diseased tree does not prevent the spread of oak wilt. It is likely other trees are infected. If more trees die and the buyers were not properly informed, the seller could be in a legal battle with an irate buyer. Bottom line: There is a question regarding diseased trees on the Minnesota Sellers’ Disclosure Form. Fill it out honestly and be prepared to remove the diseased trees properly and safely, if asked. It is never a good idea to not tell the whole truth on the property disclosure form. 

If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of RE/MAX Specialists, a call or visit my website for a FREE Relocation Packet or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2012 www.terieckholm.com

Wednesday, January 11, 2012

Wordless Wednesday (Almost)--This Job is NOT for the Faint at Heart!


Throughout the warmer months this past year when we traveled along 94 northeast of St. Cloud, Minnesota we had an opportunity to see power line construction and the lines being strung via helicopter. I was the passenger and shot the photos as my husband drove...Absolutely no stopping to sightsee! The MN highway Patrol watches diligently for those who are paying more attention to the helicopters than the road. These lines are being strung along the busy interstate while cars and trucks travel at 70 mph. 

One day while I was driving...not photographing...there were 3 people sitting at the tops of three consecutive poles, patiently waiting their turn to connect the lines. What a crazy job! Another day they were using blasting caps and there were explosions that fused the lines together. 

The process is amazing. The idea that someone could sit on top of a pole for hours is unbelievable. The powerline construction is halted for the winter months...but I will try to capture a polesitter in the spring!

If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of RE/MAX Specialists, a call or visit my website for a FREE Relocation Packet or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
Copyright 2012 www.terieckholm.com

Sunday, January 1, 2012

Speechless Sunday (Almost)--It's ALL about BALANCE!


As we embark on a brand new year, I wanted to share a photo I took on a recent family vacation to Walt Disney World in Orlando, Florida. We had to see what was drawing such a huge crowd at the France Pavilion and were treated to a show where this man stacked chair after chair into a tower on which he balanced on top. To do this with a crowd of several hundred onlookers must be a difficult task...more likely impossible for most of us. But this performer did it with ease (and lots of concentration).

Hopefully the real estate market will become more balanced in 2012 but since we cannot control the market, try to incorporate balance into your life.


Wishing Everyone a Very Happy and Blessed 2012!
  
Remember by concentrating on balance, amazing things can be achieved!


Copyright 2012 www.terieckholm.com