Wednesday, September 19, 2012

Essential Fall Checklist for Homeowners (and Potential Spring Home Sellers!)

Brrr…we have had the first cold snap of the year after a long hot summer. As the overnight temperatures have been dipping down into the range where Minnesotan’s pull the extra comforter from the closet we know it’s that time of year. Fall is just around the corner and leaves are beginning to turn. Soon the golds, reds and yellows of autumn will cover the landscape throughout Anoka, Chisago Ramsey and Washington Counties in Minnesota.

I know, I know...It is ONLY September so we have will have a few warm days ahead. Before the snow, ice and winter winds arrive, we know it is time take care of the autumn chores to protect our biggest investments, our homes, from the winter ahead. And for potential 2013 spring home sellers, there will still be a perfect “Indian-Summer” day or two, to spruce up their home’s exterior.

As a REALTOR® in the north and east Minneapolis/St. Paul area, I know how important periodic home maintenance is. Minnesotans embrace living with four seasons and though some winters are mild but others can be brutal. Taking one weekend in the fall to get your home ready can prevent damage from the Minnesota Winter elements. An unprepared home can require costly repairs in the spring.

Here are a few important autumn reminders of repairs and preventive maintenance tips for all homeowners:  
  1. Check Rain Gutters Clear leaves and other debris that might clog the drainage. Check to see that any screen or leaf guard is not blocking water flow. A blocked gutter can cause an ice dam when the snow flies.
  2. Winterize lawn mowers or tractors and tune up the snow blower. If you have a plow service, make contact and update your contract prior to the first snowfall. Remember in Minnesota, we can get a first big snowfall in October.
  3. Change security lightbulbs in hard to reach outlets. Making a change to a long lasting bulb now can avoid having to climb a ladder to reach the tip of a garage over an icy driveway.
  4.  Remove Hoses from water spigots. Turn off, blow out and winterize sprinkling systems. If spigots are not frost-free or if you are unsure, shut off water supply to exterior faucets to prevent burst pipes in subzero temperatures. It’s a good idea to coil and remove hoses from the house too.
  5. Clean and Tune Furnace This should be an annual event so your home is ready for those first cold evenings. Remember to change the furnace filter every month for best efficiency...even if the packaging says "6-month filter".
QUICK TIP: Change filter when you make your monthly mortgage payment so you don't forget.
  1. Caulk and/or weather-strip Check all windows and doors and caulk or weather strip as needed.
  2. Paint Exterior Check deck, siding and trim for peeling paint as autumn one of the best seasons to paint with its low humidity and crisp breezes.
QUICK TIP For HOME SELLERS: If you are planning to sell in the winter or early spring, touching up peeling paint is essential as it may be too cold for paint to adhere until next April.
  1. Seal Asphalt Fall is the last chance to seal the asphalt driveway prior to winter freezing. Fill cracks and topcoat if necessary.
  2. Inspect the roof for missing or damaged shingles. Verify that the flashings are sealed from rain and snow.
  3. Snap a few fall photos while the fall perennials and trees are vibrant with color! Golden yellow oak leaves and vivid red sumacs will look awesome in the local MLS if you decide to sell your home over the winter.

Copyright 2012

Tuesday, September 18, 2012

Hobby Farm in Your Future? What You Need to Know to Finance Your Dream

This summer, I have had the opportunity to assist a young couple scour the north and east metro for a small acreage property. We’ve searched across western Anoka, southern Chisago and northern Washington Counties, for something that will meet there small acreage requirements. Our search discovered the perfect country farmhouse on 40 acres and well within their budget too! My preapproved clients were excited when they wrote up their offer. Everything changed a day later when their loan officer called to inquire. “Are there crops growing on that land? ANY crops at all?” Well, the answer was yes. Suddenly the dream homestead had become a commercial property requiring agricultural financing.
No big deal, right? Wrong

The residential financing they were approved for limits property acreage to a maximum of 20 crop-free, acres. Yes, the land must be totally free of any planted crop when you use residential financing (even their loan officer was a bit surprised by this more stringent restriction). Of course the restriction is sometimes overlooked if the land is wetland and/or is densely wooded and therefore deemed unusable for farming. The whole situation was a bit of a surprise to my clients. They had never asked the questions as to whether there was a restriction on their preapproval for the size of the property. Of course this is partially because we just never expected to find such a large piece of land in their price range.

In order for my clients to purchase the property the fell in love with, they required agricultural financing. This is a whole different ballgame using a specialty lender. The mortgage will require a 15-20% down payment and it is only available at an interest rate significantly higher than what was quoted by their residential lender…Usually 2-3% higher.This can be a deal breaker if the original financing plan was 3% down FHA or a low down payment conventional loan with private mortgage insurance.

Why the difference? There are laws to protect farmers from foreclosure before the harvest. Current law seems to affect anything over 20 acres. It seems that underwriters have become stricter since the housing downfall. My understanding of the situation is this: If land has been rented to another party for farming, it would be very difficult for the bank sell the foreclosed land quickly. If there are crops involved, the crop would belong to the farmer not the bank.

If you are searching for a Minnesota hobby farm or small acreage property, it is very important to ask your loan officer the “what if” questions.

  • What if I find the perfect home on 25 or 30 acres?
  • What if half of a 20 acre has been rented to the neighboring farmer for a corn crop?
  • What about a horse ranch that has 5 acres of hay planted?
Understanding how many acres are allowed using the financing you are preapproved is essential when shopping for a Minnesota hobby farm.  Asking questions prior to the home search for can save you time and heartache as you search for your dream home.

Copyright 2012 Teri Eckholm 

Monday, September 17, 2012

Going, Going, Gone! Why Homebuyers Need to be Ready to Write an Offer

It seems a bit unbelievable to some homebuyers. After a few years of hearing about a real estate market where buyers were in the driver’s seat now buyers are hearing, "Sorry, that home is SOLD!"

That is the very market we are now in folks! There are still homes being listed every day. But with these phenomenally low interest rates (Did you ever think a 15 year mortgage would be UNDER 3%?!), there are many more homebuyers off of the fence and in the market. If you are a first time homebuyer and looking for a home in the $100K-150K range, you are not only battling against first time homebuyers but also investors to find a good deal. Investors have plans to fix up and resell or put a renter into the home. And since investors often pay with cash, there are no worries to the seller as to whether the home will appraise or the financing will fall through. It’s tough competition for an FHA first time buyer who wants the seller to pay closing costs. 

So what’s a homebuyer to do? 

Get organized. If you want to buy a home at a good price in this market, you need to have a plan.

Plan to Work with a REALTOR® This is not a market to go at it alone. Find a good, trusted professional who is willing to show homes as soon as they hit the market and sign a contract for buyer’s representation. In most cases, it will not cost you anything because the seller will pay the commission.

Plan to Get Pre-Approved for a Loan Without a pre-approval letter, you won’t be able to submit an offer. Most sellers won’t consider accepting a purchase agreement without a letter from a loan officer stating the buyer is qualified to purchase the home. Some bank owned properties only will accept specific types of financing so proactive buyers will be pre-approved for a loan.

Plan to Define Your Criteria Once pre-approved, you know what you can pay for a home so define all other aspects of your purchase including location, school district, number of bedrooms, bathrooms and garage stalls.

Plan to Get Set Up to Receive NEW Listings Call YOUR REALTOR® and ask to be set up to receive all new listings as soon as possible. This is one of the best perks of working with one agent, they know what you are looking for and will help you find it. I like to use a program called Listingbook  so my buyers can leave any property related questions for me to answer on their favorite homes. This is a great way to weed out short sale listings that already have offers too. I review favorites and if there are any short sales with an offer in to the bank but still listed as active on the MLS, we can note it and move on.

Plan to Be Ready to See Homes ASAP The good ones are going fast in this market. If a property meets your criteria, you will need to see the home as quickly as you can.

Plan to Make a Quick Decision Many homes are in multiple offers after a day or two on the market. When a serious homebuyer sees a home that they are interested in, they have to make a quick decision and write up the purchase agreement as soon as possible.

Prepare for Multiple Offers In the first time homebuyer price range, I have seen multiple offers on almost every home I have written a transaction on this summer. Many homes are listed at low prices to encourage more than one offer. If the home appears to be an excellent value, plan to write your “highest and best” offer on it!

Persistence Pays! This summer I had a young couple looking for a starter home who wrote SIX offers before finding their dream home. They were persistent and finally realized their dream. Another young family wrote four offers. In a lower price point, it may take a few offers to get a home, but the reward is worth the effort!

Copyright 2012

Sunday, September 16, 2012

10 Reasons People L♥VE Living in SHOREVIEW, Minnesota

Considering a new home? Consider Shoreview, Minnesota  This vibrant community attracts attention for many other reasons besides the twin, skyscraping, radio transmission towers reaching high 1400+ feet into the air. Though not officially incorporated until 1957, Shoreview has a rich history. A good portion of what is now known as Shoreview was once inhabited by Dakota and Ojibwe Native America tribes. It was ceded to the US Government from the Ojibwe in 1837 and soon became known as a farming community. The Soo line of the railroad expanded into Shoreview in the late 1800’s and soon New Englanders and other European settlers came to farm the land. The iconic radio towers weren’t built until much later in 1963 but those three towers on 694 are still the tallest structures in the state of Minnesota. According to the 2000 census, nearly 26,000 people called Shoreview home. No doubt this decade’s survey will only add to the number of residents in this vibrant community.

Here is a top ten list of reasons why Shoreview Minnesota is such a great place to live.

#10—Turtleman Triathlon. Shoreview is home to Minnesota’s oldest triathlon, the Turtleman Triathlon which is run every August starting at Turtle Lake park. Hundreds of athletes take to the streets and shores of Shoreview for this annual summer event.

#9—Free Music and Movies! Concert in the Commons has been an annual tradition from June thru August. In 2010, free movies were added to the mix of family-friendly activities being shown at the Shoreview Commons Pavilion on Friday evenings in August. Bring popcorn or a picnic and have fun.

#8—Einhausen Sister City. For nearly a decade, the City of Shoreview has had a unique relationship with Einhausen, Germany as its sister city. As sister cities, Shoreview and Einhausen are partnered to promote a cultural understanding between the United States and Germany by creating opportunities for residents in the two communities to form personal relationships.

#7—Awesome Schools. Although Shoreview does not have it’s own secondary schools it is served by two highly rated school districts: Roseville School District 623 and Mounds View School District 621. It also has three community based public elementary schools within its borders: Emmet D. Williams Elementary School , Island Lake Elementary School, Turtle Lake Elementary School .

#6—Lakes and Parks. Shoreview has several of Minnesota’s 10,000 lakes within its borders. The largest and most notable are Island Lake, Lake Owasso, Snail Lake and Turtle Lake but there are also several smaller named lakes in Shoreview including: Grass Lake, Emily Lake, Lake Judy, Lake Wabasso, and Martha Lake as well as Rice Creek to enjoy the view of one of Minnesota’s greatest resources. And as for parks, there are too many great ones to mention…just check out this link to some of the best! Shoreview Parks and Playgrounds

#5—Bicycle Friendly Community! According to Shoreview’s community website, it is only one of three communities in Minnesota to have earned a “Bicycle Friendly Community” award. The Twin Cities Bicycle Club has notes several rides on it’s schedule on Shoreview’s trails all summer long!

#4—The Tropics! Where do you go for a little splashing fun when the Minnesota lakes are frozen? Why the Tropics of course! The Tropics Waterpark is an indoor oasis located in the Shoreview Community Center for kids of all ages to enjoy some water fun whether it is too hot & humid or cold & blustery. Since it opened, it has been a popular birthday party venue for residents in the north metro. But most people don’t want to wait for a party, everyday is a party at the affordable Tropics Waterpark.

#3— Enjoy a Slice! The Slice of Shoreview is an annual summer event with something for everyone. This community extravaganza held every July includes fun activities that have included a petting zoo, parade, car show, art fair, talent show and carnival. It is as fun as a county fair and an event the entire family can enjoy!

#2—Eclectic Options for Living. Whether you want the convenience of a low-maintenance townhome or condo, a home with a lakeshore view, a 1950’s rambler or bungalow, or a recently constructed, modified two story, you can find an affordable option to rent or purchase in Shoreview.

#1—Friendly People. The number one reason for living in Shoreview is the welcoming community atmosphere. Isn’t that what most people search for in a place to call home?

Copyright 2012

Friday, September 7, 2012

Question from First Time Homebuyer--Is a Home a Good Investment?

 “Is buying a home really a good investment?" That question is asked quite often these days especially as the real estate market continues to show signs of recovery. As the market heats up and there are more homes with multiple offers due to low interest rates, some first time homebuyers continue to wonder whether buying a home is a good financial investment.

For decades, buying a home was considered one of the safest investments a person could make. It was "The American Dream". But then came came the crash or burst bubble and people became more cautious about real estate investing. Now, homes are selling again but the question does remain; Is owning a home a good financial investment?

In my opinion, YES, buying a home can be a wise investment and not just because I am a REALTOR®, but because I, too, am a homeowner. The key is treating your home like the investment that it truly is. It takes discipline and time for your investment to grow. And like any other investment, if you have to sell 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 a low price though that is a very important piece to the puzzle. Homes were a at rock bottom prices a few months ago and when coupled with extremely low interest rates, many people started thinking now may be the time to buy that first home. But with more buyers in the mix, multiple offers are becoming the norm. It is important not to over extend and get caught up in a bidding war that you cannot afford to get that "perfect" home. 

Buying smart also means getting a mortgage that you can afford and that is safe, preferably at a fixed rate rather than an adjustable rate, that can fluctuate into something that you cannot afford. Interest rates are at record-breaking low rates. Talking to a knowledgeable 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 before the market crashed, snatched up any home they could  get an offer accepted on. They were tire of submitting multiple purchase agreements and being beat out by other buyers in multiple offer situations. They stopped worrying about the perfect floor plan or caring whether the home was on a busy road or next railroad tracks. As the market picks up, buy smart and always think about the need to potentially resell the home.

As a REALTOR® who works often with first time buyers, I spend time helping my them to understand the positives and negatives of the location of each property they 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 built 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 landscaping your forte’? 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. 

 Copyright 2012

Thursday, September 6, 2012

First Time Homebuyer’s Word of the Day is Earnest Money

In an episode of Cash Cab, a television quiz show that takes place in the back seat of a New York City taxicab, a family was stumped by the acronym, FSBO. This is a often term used in real estate to describe a person selling their home by owner (For Sale By Owner). As a REALTOR® I was a bit surprised that such a simple term I use everyday would be unknown to so many. But then it got me thinking of all the times a glazed look came over a buyer’s eyes when I talked about escrow or earnest money. These can easily be confused with other real estate and mortgage terms like down payment or cash to close. It is totally understandable because most homebuyers do not buy houses everyday.

There are so many terms that could possibly confuse a First Time Homebuyer that I thought an online glossary of real estate terms might be helpful. So I have an ongoing series of posts for the first time homebuyer with explanations of the most often used (and sometimes confusing) real estate terms. This way you can skip buying that big “how to buy a house” book or attending that
First Time Homebuyer Class and have a quick resource at your fingertips. Today’s Real Estate Term is:

Earnest money The funds that a buyer submits with their offer or purchase agreement to demonstrate to the seller their seriousness about buying the property. It should be an amount sufficient enough to indicate to the seller that the buyer will not walk away from the deal without good reason. It is not the same as a down payment. If your offer on the home is accepted, the earnest money check will be cashed and placed into a broker’s trust account. The funds will go toward the purchase price of the home.

Copyright 2012

Wednesday, September 5, 2012

Barbecuing Gummy Bears!

Working as a REALTOR® in the north and east Twin Cities, I often use Hwy 61 as an alternate to 35E when traveling from White Bear Lake to Forest Lake. I'd probably passed this little meat market in Hugo a few thousand times over the years but never thought to drop by. That is until Kare11 did a story on their unusual bratwurst recipe that included Gummy Bears! You heard that right....they actually mix candy into the meat when making the links. Gummy Bear Brats had to be a joke, right? Wrong...well, sort of.

The story goes that a persistent customer who kept sending people over to Grundhofer's Old Fashioned Meats as a joke asking for the unique flavor. Finally the owner gave in and made up a batch. And the rest is history.

So about a year ago, after seeing the news report and driving by the shop for over a decade, we Grundhofer's. Heck...we just had to try a gummy bear brat. We picked up a package of fresh gummy bear brats and a package of regular ones too...just in case the candy infused links were too gross to eat. The next time we fired up the BBQ, we roasted gummy bears...wrapped up in a brat, that is.  They were surprisingly delicious! And as a further surprise, we preferred the sausages with the cherry, lime, orange and/or lemon candy bits to the regular ones.

Now, every time we have guests visit we roast up a gummy bear brat for them. The reaction is the same at first..."Really? No...well I'll just try a half of one." People are tentative when the see the sausage cut in half and red, green or orange melted candy oozes onto the bun. But they are good!

So if gummy bears brats seem a bit too weird, no worries, Grundhofer's has other a few dozen other options. How about a Grape Koolaid Brat instead? 

 Copyright 2012

Sunday, September 2, 2012

Going Above and Beyond—What Good Service Really Is

In my book, extraordinary service is doing what needs to be done to help resolve a situation, even when it is a long shot or falls into the “not-my-job” category. As a REALTOR® in the Minneapolis/St Paul metro area, I always try to provide extraordinary service to my home buyer and sellers but last week a New York garbage man has me beat in the exceptional service department hands down. Gary Gaddist, a parks department worker in Manhattan, dug through trash to find the wedding ring of a park patron when he found her handwritten plea left on his truck. I would guess that trying to find a ring in a truck full of New York City trash is like the smelly version of looking for a needle in a haystack. Gary didn’t have to do anything. No one would have known if he tossed the note…but he didn’t. He was able to be a hero to someone he didn’t even know by providing a bit of kindness and exceptional service.

Working in real estate, I don’t have to dig through trash to provide good service. I try to do what is right to get the job done. Last week, at a closing for my first time buyer’s new home, the sellers never arrived at the Maplewood title company office. While my buyer was wrapping up his final signatures, my closer received a call from the seller’s closing agent asking why we weren’t at the Fridley office. Our closer works in Fridley but since the house, buyer and sellers were closer to Maplewood, the closing had been arranged for the most central office, Maplewood from the get go. Unfortunately, this mistake meant the seller’s proceeds check was in one place and my buyer’s new house keys were in another. Even though the sellers were directed to go to the wrong place by their closer, their agent demanded we immediately drive to the other office or there would be no sale because her clients weren’t moving.  It was a ridiculous stand-off but I didn’t want either my buyer or the sellers to be further inconvenienced so we completed the final HUD signatures via email. I drove the sellers’ check across town and picked up the keys and dropped them at my buyer’s house. I don’t know if it is exceptional service, but it needed to be done.
This was the second time last week I had to run around with checks to keep everything working smoothly. Earlier this month a closing date was moved up a week to a time when my selling clients were scheduled to be on vacation. They pre-signed their documents and I delivered their proceeds check to them as soon as they arrived home. Easy-peasey!

Many situations come up in buying a home. Some can be planned for and others just happen. When you purchase or sell your next home, find a REALTOR® that will work hard to find the solution to even the most unexpected problem. Extraordinary service isn’t difficult it just takes a little “extra”!

Copyright 2012