Moving, Millienials and Multiples—Buying is Not So Easy

Earlier this week I received a call from my electrician. I wasn’t surprised by the call since we have an open permit on work he completed a few weeks ago. But things have been crazy busy in real estate for me as well as construction for his business so it hasn’t been a priority.  Interestingly, the call had less to do about my electrical job and more to do with my real estate expertise.

 It turns out that his twenty four year old son is buying a first home and after being in the fourth multiple-offer situation in less than a month, my electrician was wondering if this is normal. His son’s price range was very low as is the case with many younger, millennial buyers and he was looking for something “move-in ready” too.  So yes, it is an extremely very common predicament in the greater Minneapolis/St Paul real estate market.

Right now there is kind of a perfect storm of demand for homes under $150,000—and in some neighborhoods of $200,000, $300,000 and more.

Housing Inventory is Down

• Rising rents—An average of 15% across the country between 2009 and 2014
• Low interest rates—Rates remain around 4%
• Construction investors—Planning to refurbish and flip
• Real estate investors—Planning to refurbish and rent

There has always been a demand for lower priced homes in the Twin Cities. Especially the ones that are move in ready.  These are the ones with “good bones” ; i.e. structurally sound but might need minor elbow grease and cosmetics. 

But as rents rise, so does interest in purchasing a home.  A recent article questioned whether millenials are too scared to own a home; I find in Minnesota, this is to the contrary. Many millenials are starting to ask the question, “Should I make that purchase after all? It will be cheaper than renting.”  I have spoken with several 20-somethings who are starting to think trading off the option of mobility for more cash in the wallet might be a good plan.  But, they are going to have to pack their patience and be ready to write an offer on the spot for the best houses. And, they will have to keep that signing pen at the ready too because they probably won’t get the first home they write on. The demand is HUGE for lower priced properties with “good bones”.

There are ways to write a standout offer in a stack of multiples and I share these tips with buyers I am representing. Contact me for more details.

Need to know more about buying or selling a Twin Cities home? Let me be your professional guide. If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. 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 2015 www.terieckholm.com

Free Money? Not Really--The True Story of Seller Paid Closing Costs

It is a very exciting day! You've just met with your loan officer and are pre-approved for your first home loan. You are ready to start shopping! You are certain you have enough money in the bank for your down payment. After all, your loan officer said, the seller will pay your closing costs, so you're covered right? 

Well, not so fast! It's not like sellers are handing out free money. So what's real story?

When a home buyer writes up an offer for a home, they can ASK the seller to pay closing costs up to a certain percentage allowed by the loan program. But the seller does not have to agree. If they do agree, it is like asking the seller to reduce their price. 

For example, if a buyer writes an offer of $200,000 on a home listed for $200,000 and requests the seller contribute $5000 to their closing costs, it is not a full priced offer. The seller will only get $195,000 for the sale. 

This is very important for a first time home buyer to understand when negotiating a home purchase. Starter homes in the Minneapolis/St Paul area are being snapped up very quickly. Most homes listed under $200,000 will have multiple offers shortly after hitting the market. If in a multiple offer situation, you need to write an offer that is attractive to the seller. Sellers do not want to give away money to you or anyone else. However, sellers do pay reasonable closing costs for buyers all of the time. It is all part of the negotiations.

Need More Tips on How to Write an Offer on YOUR First Home? Let me help! If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. 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 2015 www.terieckholm.com

This REALTOR Welcomes Helicopter Parents!

“I was accused of being a helicopter parent.”  This statement was recently made by a friend of mine while we were chatting at a local coffee shop about our adult children.

My response to her was, “Really? Did you say thank you?”

Being a helicopter parent doesn’t always have to be a bad thing. It means you care about your children enough to give them advice rather than let them go off on their own and make mistakes. Okay, it’s not a good thing to ride with them on the school bus, follow them into the classroom and do their homework. But a mom going to check out colleges with her daughter or a dad going to the car dealer with his son isn’t such a bad thing is it? 

As a REALTOR®, I come across helicopter parents all the time. Buying a first home can be an exciting, but also a somewhat scary, experience. It is the first big purchase most young people make. One that will have lasting effects on their live if they make a huge mistake. I am not surprised when my young buyers say that their parents want to see the house or attend a showing. In fact, I welcome moms and dads to attend showings or a meeting where we write up a purchase agreement. Usually after a few minutes of questioning by a concerned parent, they realize I am not just out to sell a house as quickly as possible. What I want as a buyer’s agent is the same thing that any parent would want for their child. I want my client, their child, to be happy with their home purchase. When someone signs a buyer’s contract for representation with me, I have fiduciary duties to put their needs first. I work in the best interest of my client at all times. This means full disclosure on the condition of the home, pointing out things to ask the sellers or an inspector about as well as preparing the paperwork noting contingencies that will protect the buyer if everything is not as it seems.

I have received almost as many thank you notes and emails from parents after successful closings as I have from my home buyers.   After all, we had the same goal, for the new home owners to be happy with their first home.

Copyright 2014 www.terieckholm.com

Real Estate Word of the Day--Septic System

Buying a home is often a once or twice in a lifetime experience. There are often lots of things to learn. Buying a home on acreage has it's own set of unique terms that the average city-dweller might not have heard before. 

From time to time I am surprised that a simple term I use everyday as a REALTOR® is like a foreign language to some home buyers. It is not unusual to see a glazed look come into a buyer’s eyes when I talked about escrow or earnest money but also when I mention well water, septic systems and compliance tests. The confusion is totally understandable because most home buyers do not buy houses on acreage everyday.

There are so many terms that could possibly confuse a home buyer that I thought an online glossary of real estate terms might be helpful. So I am continuing my 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 Home Buyer Class and have a quick resource at your fingertips. Today’s Real Estate Term is:

Septic System—If a home is not connected to a public sewer, there will be a private system that will hold and/or process the waste called a septic system. There are several types of systems. They can be a holding tank where all the waste must be pumped out or a tank that releases the waste water back into the environment via a drain field or mound. A private septic system can be owned by the individual property owner or shared by a number of homes. 

It is important to know what type of septic system is on a property. All systems will require maintenance but the type of system, indicates to a buyer how often the maintenance will have to take place and how much it will cost. Shared systems usually are part of an association where fees are collected on a periodic basis to pay for pumping out and maintaining the sewage system. 

It is also important to understand what can and cannot go into a private sewer system in order to keep it in the best condition possible. The cost to replace a private septic system can be in the tens of thousands of dollars. Proper maintenance and care can extend the life of the system by many years.  For additional information check out the University of Minnesota Extension Service's guide to Understanding Your Septic System.

 

Copyright 2014 www.terieckholm.com

Resolution for 2014--Buy a First Home! (And a Class to Help You too!)

Did you make a new year's resolution? 

Maybe it was to workout more, eat healthier, be happy or spend more time with friends and family. Or maybe you resolved that 2014 is going to be the year to buy YOUR first home. 

What a great decision! Owning a home is still the American Dream and with housing affordability in the Minneapolis/St Paul area, this can be a very realistic aspiration. Home ownership is not just for older, wealthy Americans. People of all ages can afford to be homeowners in the Midwest. In fact, many young people are buying homes in today's market.

In 2013, I sold several starter homes to people just a few years out of high school. The homes these clients purchased were in all cases, move in ready, solid houses in the north and/or east metro. It is not unusual to find a nice home in a price range that makes owning a home as affordable as rent if you know where and how to look for them.

Intrigued? Wondering what is the first step to buying your DREAM home?  

Find a REALTOR® you can trust! 

As an agent, I help my first time buyers through the entire home buying process from pre-approval until closing day. But, it would be hard to trust someone without having met in person.  Give me a call and we can set up a meeting. I am very easy to talk to so call me anytime.

 
Copyright 2014 www.terieckholm.com

Couch Ouch—Resist the Urge to Splurge!

Buying a first home is an exciting time. There are so many things that have to be arranged and purchased besides the home like home owners insurance, utilities, cable, internet, moving truck rentals and furniture. There is one common theme in all of these arrangements, money. Everything is going to cost something and quite possibly, require a look at your credit.

But this should be no big deal, right? You found the home, wrote the offer, it has been excepted  and were pre-approved for the purchase, so now you are good to go. You don’t have to worry about that silly credit score or credit ratio the loan officer had you so uptight about anymore, right? WRONG!

Many first time home buyers forget that as a stipulation for the loan, a credit report can be pulled right up to closing to make sure there are no new debts. This means,don’t open any new lines of credit or you could find yourself without a home.

Recently, a young client of mine had to sweat out the last few days before closing due to the purchase of a couch. He was excited about his first home and really didn’t have a couch to sit on….and there was a HUGE sale at a local furniture store. 

Had he used the credit card he already had in his wallet, there wouldn’t have been an issue. But the salesperson at the furniture store encouraged him to "get a better deal" with a new store card. But furniture salespeople do not know whether or not this great little card will affect your credit score...they just get a bonus every time someone signs up. That "deal" came with a new line of credit that could have cost my buyer the house. Fortunately, he didn’t have Cadillac tastes and his furniture purchase and the accompanying line of credit was somewhat reasonable. 

But the story didn't end there. Upon realizing his mistake of opening a card before his home closing,  my buyer tried to “fix” the situation by transferring the charge from the new furniture card to his existing credit card account. This actually makes things worse. FICO scores can be affected negatively when a credit card is used to pay off another card.

About a week before closing, I received a text from my client about this little “couch ouch”. He was completing the paperwork for final approval and there was “the” question, “Have you opened any new lines of credit?” He wanted to know how to answer it and told me about the new couch (and credit card that it came with). Now, he was wondering if he should borrow money from his parents to pay off the card or return the couch. What was going to fix the situation and still allow him to purchase the home?

 

Okay, I’m not a loan officer but Ido know there has to be a paper trail for any funds coming into accounts right before a closing too. They will pull the bank statement and every big deposit will need to be explained. Plus it will not negate the new line of credit. I told him, “Call your loan officer asap!”

The good news for my client was his mistake was small price-wise and didn’t prevent his home purchase. Had he obtained credit for new appliances, hardwood floors or a car, there might have been a different outcome. However, the situation did cause him some needless worry a few days before the closing. Sharing the story is a good lesson for others. Remember per-approval isn’t the same as final approval on a loan. Your credit and income will remain under the scrutiny of the underwriter until closing.

My mother always told me, there  is always another sale. So be patient and resist the urge to splurge on a new couch, carpeting or appliances before you sign the final papers on the purchase of your home.

IMPORTANT REMINDERS

• Don’t take out new lines of credit. If they ask for your social security number it will most likely cause a tick on your report.
• Be prepared to explain any large influx of cash into your bank account, if you receive a gift or unexpected payment of any kind.
• Don’t quit your job or reduce your hours. Your income will be verified right before the closing.
• When in doubt, call your loan officer. They would rather answer a call now than give you news later than you no longer qualify for the loan.
• There will ALWAYS be another sale. Try to shop after your closing not before! 

Copyright 2013 www.terieckholm.com

Why Should a Home Seller Pay the Buyer's Closing Costs?

Sellers are excited about being in the driver's seat again...yes, it is a sellers market in the Minneapolis/St Paul north metro again. When I do a market analysis on a home for a potential home seller, I give always net sheet of estimated of closing costs associated with closing the sale of the home. 

One of the items on the list is “Seller contribution to the Buyer’s Closing Costs.” This particular cost doesn't sit well with most homeowners. Every now and again,  a seller will verbally scoff and say something to the effect of, “My own closing costs are high enough. Why would I want to contribute to the BUYERS too?”
 
But even in this seller's market, the answer is quite simple: So they can BUY your house!
Today most buyers are required to put down a minimum of 3-5% of the purchase price of the home as a down payment. The closing costs for a buyer include title insurance, home owner’s insurance, appraisals, loan origination fees, name search fees, filing fees and more. As a REALTOR® in the communties throughout Anoka County and the north metro Twin Cities, I see these closing costs will run anywhere from $6000-$8000 for a first time buyer. Couple this amount with a required down payment and few buyers have the funds to purchase a home. 

It's not just first time buyers that need the help either. Many move up buyers are getting out of their small starter homes that they purchased just before the housing market downturn. The market has recovered enough now that these families can break even at best. They don't have a huge down payment, but want to make the move up to a larger home so they often ask for closing cost assistance from the seller to make the deal work.

The bottom line is: homebuyers have the option of waiting and saving for additional closing costs or asking for seller assistance. In many cases a financial institution will allow a seller to assist a buyer by paying either points to reduce the interest rates and/or closing costs.

How does this work? Let’s say that a home is on the market for $200,000. The buyer writes their offer for $195,000 and their financial institution allows up to 3% seller’s assistance with fees and closing costs. They decide to ask the seller in their purchase agreement document for $5000, thus the net offer to the seller for the home is $190,000. 

If a seller does not want to pay the closing costs, the buyer in many cases will not be able to purchase the home. It the offer is accepted, the seller’s proceeds at closing would then be reduced by the $5000. Sellers do not have to come up with the funds in cash if there is sufficient equity in the home to cover both the buyer's and the seller's costs.

When an offer comes in on a home, it is sometimes confusing to sellers what the sale price versus net number is. In the case above, the $195,000 would be the sale’s price on the purchase agreement but by paying the $5000 in closing costs, the seller’s net number is really $190,000 less the seller's own closing costs including all fees and commission.

If as a seller you decide to counter on the original offer, you can counter on the sales price of the home or the amount of closing costs paid. When counter offers are involved, a seller needs to make certain that they understand what the net proceeds will be in each offer and counter offer.

This is where the assistance of an experienced, professional REALTOR® comes into play. As a real estate agent, I provide my clients with a seller's net sheet that outlines all costs and fees that has been updated after receiving the offer. When counter offers start going back and forth, I reiterate at each step what my seller's net number to help eliminate the confusion.

Assisting a buyer with closing costs can be the ticket to getting your home even in a seller driven real estate market. Understanding the process is simple with the assistance of a knowledgable real estate agent!

Copyright 2013 www.terieckholm.com

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!

Copyright 2011www.terieckholm.com

REALTOR® Selection 101—How to Choose the BEST REALTOR® for YOU! (Part One 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. Part one of this article outlines how you can prepare yourself to set up meetings with potential REALTORS®. Part two (which I will post tomorrow) will give you specific questions you can ask of potential agents so that you can make a good decision.

Step ONE
Ask YOURSELF these few questions


1. Who do you trust for advice?

Is it a parent or grandparent? Maybe a close friend or uncle? Or is it your sibling or boss? Think about the qualities that person possesses and why you look at them as an advisor. If your trusted advisor is your grandfather, you might prefer working with someone older. If you tend to bring your problems to your best friend, you might want a REALTOR® with similar characteristics to your friend.

2. How demanding are you?

If you are an impatient person who needs answers as soon as you think of a question, you will need a REALTOR® that is available to you. If you are more laid back, you might prefer a REALTOR® with a similar style.

3. Do you prefer to use email, text or the phone as your main source of information?

Some REALTORS® are very computer savvy and will answer an email within a few minutes. Some love to text with their clients to provide an immediate answer. Others answer emails once a week and don't even know how to send a text There are REALTORS® who return calls only one time a day or week. There are others that always answer their own phone and others that have an assistant to field calls and answer basic questions.

4. Are you into gadgets?

If you are listening to your Ipod while you surf the net on your wireless tablet, you might prefer working with an agent who presents your market analysis in a Powerpoint presentation or emails it to you in a pdf file. If you prefer a paper document to refer back to and make notes on, a REALTOR® with more a more traditional style might be what you need.

5. Do you have expensive tastes and exclusive brands or do you live more modestly?

If you like the finer things in life, you might have more in common with a REALTOR® who drives a BMW and signs contracts with a Mont Blanc pen. If you have a more relaxed style, a REALTOR® in a Ford or Toyota Sedan that uses personalized ballpoints might be more your style.

Step TWO
Research

Even if you have just made mental notes on your preferences as you read the above questions, you now have a good idea of what type of person you prefer working with. Armed with this information, it is time for the second step. RESEARCH Check out websites of potential agents BEFORE you meet them. Read their blogs and review their profiles to determine what their style is. If you cannot ascertain their style from their site, move to the next agent. There are hundreds of good agents out there. But if they cannot market themselves, how will they be able to market your home? Come up with a list of 4 or 5 potential agents and visit your state’s department of commerce website to check for violations on each potential agent’s record.

Now you are ready to interview potential agents. Get some great questions ready so that you can find the best REALTOR® for you. Having trouble coming up with great questions? REALTOR® Selection 101—How to Choose the BEST REALTOR® for YOU! (Part Two of Two) will provide you with some tools to help with the interview process.

Copyright 2011www.terieckholm.com

100 Questions ANSWERED for First Time Homebuyers!

First time buyers have many, many questions as they move through the process of buying their dream home. Some of these are general in nature and some are very specific to a property and location. While specific questions are best handled by a local REALTOR, there is an awesome resource for those general, "where do I start" questions.
The US Department of Housing and Urban Development, better known as HUD, thought so too. HUD has prepared a list of 100 of the most commonly asked questions regarding real estate and the process of how to buy that first home.





What kinds of basic home buying questions are on the list? Here are a few sample questions:

• HOW DO I KNOW IF I'M READY TO BUY A HOME?


• WHAT SHOULD I LOOK FOR WHEN DECIDING ON A COMMUNITY?


• IS AN OLDER HOME A BETTER VALUE THAN A NEW ONE?


• HOW CAN I FIND INFORMATION ON THE PROPERTY TAX LIABILITY?


• DO I NEED TO BE THERE FOR THE INSPECTION?


• HOW DO I SELECT THE RIGHT REAL ESTATE AGENT?

The answers to these home buying questions (and 95 more), can be found at the HUD website. But while the HUD website is informative, it is only a website after all and will not have a specific answer to every question you might have. That’s where the experience of a professional REALTOR comes in. Feel free to email, call or text me at 651-336-7073 with any specific real estate question you might have.

Copyright 2010 Teri Eckholm 

Anoka County Home Buyer? Going at it Alone is A Heavy Load Indeed!

Are you a homebuyer going it alone? A renegade who doesn’t need the support and expertise of a real estate agent…at least not until you have found “THE” house. Is this the best plan to get the best deal on an Anoka County home in current real estate climate?
I read a great blog today that I wanted to share with home buyers (and sellers) in the north and east Twin Cities metro area. Will Nesbitt is a real estate agent in Fairfax, VA. As an arrogant east coast youth with Minnesota’s own Fran Tarkenton as an idol, he challenged his entire neighborhood to a game of football and was CRUSHED! (Read his full posts…The day my neighborhood crushed me. ) Will learned that day the value of having a good team behind you.

Having a good real estate team behind you is a valuable lesson lesson for home buyers too. So...Who is on YOUR team?

• Do you have an expert REALTOR® to assist you through the home buying process?


• A good loan officer?


• An expert housing inspector?


• A title and closing expert?


• Septic and well inspector?


• Are you a skilled negotiator?


• Do you have neighborhood expertise and know the value of homes in different developments?

How many homes did you buy or sell last year? A good REALTOR® will have assisted in the purchase and/or sale of several. This is expertise that a home buyer going it alone will never achieve. As a REALTOR® I work everyday with buyers and sellers on the purchase and sale of homes throughout Ham Lake, Lino Lakes, Blaine and other communities in the Forest Lake school district. It is my job to be a real estate neighborhood expert! And I have a number of great contacts to become a part of YOUR team so you don’t have to go it alone.

Going it alone can seem like a no-pressure way to buy a home, but is flying solo in a home purchase cost effective? Maybe not…Did you know, it doesn’t cost most homebuyers a single penny to have a real estate expert in their corner? But it can cost thousands to work without one. Team up with a REALTOR® who is a neighborhood expert and don’t get crushed by the weight of going it alone.

Copyright 2010 Teri Eckholm 

It Passed! Details on the Extended and Expanded Tax Credit for Homebuyers

Did you hear it? That big woosh of air was all of those buyers, sellers, REALTORS, loan officers and title representatives that had a purchase agreement with a November 30, 2009 closing date breathing out a collective sigh of relief. An extension for the tax credit for first time homebuyers was approved by both the house and senate and is scheduled to be signed by the president today. Professionals in the industry were worried about the potential bottleneck of all the closings trying to happen before the original deadline because we all know, S*** Happens on the way to the closing table from time to time. (Yep that stands for STUF…wink, wink!) Most closings will go off without a hitch but occasionally there can be delayed a day or so. However, not closing on time could have cost some first time buyers big bucks had the extension not passed.

But, as many buyers, sellers and real estate professionals had hoped, the Homebuyer Tax Credit was not only extended but expanded to include homebuyers who have owned homes in the past. Specifically someone who has owned a home and lived in it for five consecutive years of the last eight, you could qualify for the up to a $6500 tax credit. There are guidelines and limitations so understanding the program is essential.

Here are a few key details of the plan:

1. First time buyers qualify for up to $8000.


2. Current Homeowners qualify for up to $6500.


3. Purchase agreements must be written by April 30, 2010.


4. Closing must be finalized by July 1, 2010.


5. Income Limits are $125,000 for a single person or $225,000 for married couples.


6. Home must not cost more than $800,000

Copyright 2009 Teri Eckholm http://www.terieckholm.com/

June 2009 Video Update—Local Real Estate Market Continues on Positive Path Out of the Woods!

Continued low interest rates and the $8000 first time home buyer tax credit continue to build on the more positive trend and path out of the proverbial real estate woods for the Minneapolis/St. Paul real estate market. According to the Minneapolis REALTORS® Association's June Monthly Skinny, the positive signs continue that the Twin Cities market is moving out of the woods. Overall inventory is at 7.6 months currently (a balanced market would be 5.6 months). But while lender-mediated inventory stands at 5 months, traditional homesellers face double the competition with 9.9 months of inventory. The supply of bank-owned and short sale homes is down considerably. Another indicator that we are marking a path to recovery is that pending sales have increased for the eleventh month in a row….up 17% in May 2009 compared to May 2008. No doubt the $8000 first time homebuyer tax credit has played a role in energizing the Twin Cities real estate market.



Not to be out done by our friends on the west side of the Mississippi, the St Paul Area Association of REALTORS® (SPAAR) has a premier edition of their own Twin Cities real estate market video. In the just released, Market Beat, SPAAR indicates this is the perfect time for first time home buyers due to the trifecta of affordability, low interest rates and the $8000 tax credit! Lower inventory and more pending sales has had a positive effect on the sales price of area homes. On the right side of the page look for the “Related Media” heading and click to view the entire video. (Hopefully SPAAR will be posting their informational videos on YouTube soon so I can embed and make it easier to watch…until then, this is the process.)

The positive signs in the real estate market are the entire 13-county area and the north metro is no exception. First time buyers have been in the market for the last couple of months and multiple offers on well priced homes under $200,000 has become common place. Just yesterday, I tried to set up several homes in the Hugo and Forest Lake area for a first time buyer….6 of 10 homes that they wanted to see were under contract, had offers or were sold pending inspection. As those first time homes sell, move-up buyers are finally able to take advantage of the market. I am continuing to field questions daily from excited first time Anoka County buyers on the specifics of this unique $8000 Tax Refund opportunity. (If you have a question call on the program, just let me know with a call or text to 651-336-7073 or just send a quick email.)


Copyright 2009 Teri Eckholm http://www.terieckholm.com/

May 2009 Video Update—In or Out of the Woods? That is a Big Question!

It appears that the Twin Cities housing market is continuing to move forward to recovery as we head into the summer. According to the Minneapolis Realtors Association's May Monthly Skinny, there continue to be positive signs that we are moving out of the woods. Inventory did not inflate this spring as it usually does when the snow melts so the housing inventory levels that have been extremely high are starting to level off and come down. A major share of the homes sold 46%, continue to be lender-owned or lender-mediated sales. These homes are selling at 21% less than in 2008 but traditional sellers home sales prices are only down about 8%. Distressed homes are moving out of the market and that is a good thing.No doubt the $8000 first time homebuyer tax credit has continued to fuel the spring market throughout the Twin Cities as things really kicked into high gear just after the credit was announced.

A major coup for the most two neighborhoods most affected by the foreclosure crisis was the Pohlad Family Foundation Grants allowing for $8000 grants in the form of a forgivable loan to homebuyers in the 55411 in Minneapolis and 55106 zip code in St. Paul. Suddenly a surge of homebuyers became interested and now once over looked areas are seeing multiple offers on homes.
These positive signs are not just limited to Minneapolis/St. Paul and first ring suburbs. The entire north metro is seeing activity and homes selling. First time buyers have been in the market for several weeks now. As those first time homes sell, move-up buyers are finally able to take advantage of the market. I am continuing to field questions daily from excited first time Anoka County buyers on the specifics of this unique $8000 Tax Refund opportunity. (If you have a question call on the program, just let me know with a call or text to 651-336-7073 or just send a quick email.) Take a peek at the entire May video for a quick update on the Twin Cities housing move toward the edge of the woods as we make our way out…




If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet , Homebuyers Success Packet or sign up for Listingbook Twin Cities Home Search. 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 2009 Teri Eckholm http://www.terieckholm.com/

Buying a home on St Paul’s East Side? Understanding the Pohlad Family Foundation Homebuyer Program

The Homebuyer Assistance Incentive Program from the Pohlad Family Giving Foundation is the program that everyone is talking about on the east side of St Paul! It is a great program for homebuyers looking to buy in St. Paul’s 55106 zip code and available through the Pohlad Family Giving Foundation. I am currently working with several buyers who are interested in this program and boy are the homes selling quickly in these communities! Every other listing agent makes a point of reminding me about the "$8000 Pohlad money" for the buyer, as if we had not heard of the program. But few ot these agents have delved into the details. Some of the stories about the program are a bit exaggerated or misunderstood. Unfortunately, it is not as simple as a homebuyer purchasing a house and walking in to the Dayton's Bluff Neighborhood Housing Services of St. Paul to collect an $8000 check. That said, this is still an awesome opportunity if you want to live on the east side of St. Paul!
Here are some of the program's highlights:
*The funds up to $8000 are distributed in the form of a 7 year forgivable deferred loan.

*The loan will have an interest rate of 0%.

*Homebuyers must occupy the property as their principle residence for 7 years.

*Single family homes and duplexes purchases are eligible.

*The funds will be distributed on a first come, first served basis.

*It is only available in the 55106 zip code in St. Paul or 55411 zip code in Minneapolis.

* The funds can be used for down payment and/or closing costs including prepaids.

*First time homebuyers will have to take an approved homebuyer education class.

*Successful, prior homeowners will not have to take a homebuyer class.

*Funds are available to both first time homebuyers and previous homeowners alike.

*There is no maximum household income for the program.

*All homes must close prior to December 31, 2009.
If you are a home buyer interested in buying a home in the Dayton’s Bluff area and want to take advantage of this program, you NEED to be working with a REALTOR® and loan officer that understand the details of how the funding will best work for you. Must of the application process is supplemented by information provided from the mortgage lender or loan officer. Be certain that the people you select to work with really understand how the program works so you don’t miss out on this opportunity.

Copyright 2009 Teri Eckholm http://www.terieckholm.com/

Homebuyers--Listen to that Little Voice Inside Your Head!

A few days ago I received a call from a past client. She excitedly told me that she was helping a very good friend who was in the process of buying his first home. The friend was enticed into the market by a Parade of Homes advertisement a couple weeks ago. It was for a new construction home in the Lindstrom/Chisago area that was for sale for around $150,000 with a zero down financing option. The friend was intrigued and asked my past client to tag along to see the home. At the model they were told that this particular home would qualify for one of the only zero down programs still available. From the conversation, the first time buyer thought the lending program was only available on this particular home, with this particular builder so he met with the builder’s recommended loan officer and was approved to buy the home at full price. He was seriously considering buying the home. But before signing, this first time buyer and my past client started talking and thinking, maybe we should run this by a trusted professional, a REALTOR®. Since the friend had never purchased or sold a home, my client called me.

Whatever prevented this young man from signing the document, a gut feeling or voice inside his head, it doesn’t matter. The instinct was right. He hadn't looked at enough homes to know if this was a good deal. See, it is in the builder’s best interest to make a sale at the most possible profit. So, this first time homebuyer wasn’t told a few things that really changed the picture:

1. The USDA program can be used to purchase almost any home in Chisago County including Lindstrom, Chisago, North Branch, Shafer, Center City and several other communities as well. (It isn’t available in Wyoming though.)


2. A buyer does not have to pay full price on a home even from the builder. They can negotiate the sale price the same as on any other property.


3. If you walk into a model home without your REALTOR®, the builder is under no obligation to pay out a commission to your agent. This means if the friend now decides buyer’s representation is necessary and signs a buyer’s representation agreement with me, the seller/builder is not obligated to pay any commission to me as their agent. The buyer would end up paying a commission to me out of pocket or buy the home without representation.


4. The builder, or builder’s representative, in a model home is not going to tell you if there is a better deal down the street. Even if there is a REALTOR® hosting the open house, that agent represents the builder of the home. They work for the builder and have fiduciary duties to work in the builder’s best interest to make the sale of the model home….Even if it is overpriced.

Again, thank goodness for that little voice; that pull in the gut. No contracts had been signed with this builder.

I explained that the USDA program was available in several areas, including some that would be a quicker commute to work for the buyer than the home in Lindstrom. After I did my MLS search, I found several well priced homes that would qualify for the USDA zero down program. In fact one almost brand new home that had gone back to the bank 8 miles closer in with 4BR/4BA that was almost $60K less than the builder’s model. There were almost 20 homes that I sent over to this first time buyer this morning that I felt were a significantly better value than the home they were looking at with the builder.
My exact words were that had he bought this new home at full price it would have been like paying sticker price for a brand new car and discovering that as soon as you drove off the lot, the value dropped. Previously owned homes in this area are selling for significantly lower prices per finished square foot than this home.
My past client's friend is now my new client and he is very excited with all the housing options he now knows he has. He has reviewed the listings online and determine a half dozen that seem to be a good value for a first home. I, as his buyer’s representative, will show these homes over this weekend. Thanks to that little voice, that uneasy feeling, this is one first time buyer who won’t be overpaying for a home in this amazing buyer's market!

Copyright 2009 Teri Eckholm http://www.terieckholm.com/

April 2009 Video Update--Three Indicators is the Charm! Postive News in the Housing Market!

Even though the economy has not recovered, the Minneapolis/St. Paul housing market appears to be making babysteps forward to recovery in Spring 2009. According to the Minneapolis Realtors Association's Monthly Skinny, there are three positive statistics (houses available per buyer, days on the market and original list price received) indicate the Twin Cities housing market is on the right track to recovery. This video update arrived in my inbox on the heels of another article where five experts were asked to select five areas that would see the earliest recovery in the housing market. Economist, James Diffley, selected Minneapolis and “refers to it as the hope of the Midwest!” due to steady population growth and comparatively stable home prices.

No doubt the $8000 first time homebuyer tax credit has fueled the spring market throughout the Twin Cities as things really kicked into high gear just after the credit was announced.

These positive signs are not just limited to Minneapolis/St. Paul and first ring suburbs. The entire north metro is seeing activity and homes selling. Just today, I noticed that several of one of my buyer’s saved favorite homes from Blaine to East Bethel and Wyoming went into pending almost overnight. I am fielding questions daily from excited first time buyers from Anoka County on the specifics of this unique opportunity. (If you have a question call on the program, just let me know with a call or text to 651-336-7073 or just send a quick email.)

Take a peek at the entire video for a quick update on the Twin Cities housing markets “spring” to recovery…



If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet , Homebuyers Success Packet or sign up for Listingbook Twin Cities Home Search. 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 2009 Teri Eckholm http://www.terieckholm.com/

Remember When REO Used to be a Rock Band?

In the early 1980’s, when someone was talking about REO they probably meant REO Speedwagon not a home owned by a bank. Yep, back in the day when many of my friends and relatives were buying their first house, few thought a foreclosure home was a good deal. There was a section in the paper at the time for HUD homes. They were all dumps in the minds of buyers. It was deemed “too risky” to buy a bank owned home. Better to leave those houses for an investor.

In 1981 when REO (the band) was tearing up the charts with the now oldie but goodie rock tune, “Keep on Lovin’ You”, interest rates were 17%. That’s not a typo…Seven-TEEN percent! Geez…it’s a wonder anyone bought a house in the 1980’s!

Back in the days of big hair and parachute pants, first time buyers had to scrimp on hairspray to save for a down payment AND closing costs. Sellers might pay a point or two to help bring down the interest rate but they rarely wanted to pay closing costs AND points. So a first time buyer needed to have thousands to put down on their first home.

There was no internet back then either so with REO belting out “Take it on the Run” on the cassette player, buyers would traipse around town with the Sunday open house ads looking to find a home. When they stopped in to talk to a friendly REALTOR®, there was no required agency disclosure. The buyers were supposed to instinctively know that the agent worked for the seller. Almost all agents were under contract to work in the best interest of the seller in those days no matter how nice the agent seemed to treat the buyer.

And believe it or not, despite all the cards stacked against them, many, many people bought their first homes in the early 80’s—It was the American Dream after all!

FLASH FORWARD to TODAY
When someone is talking REO now, they are more than likely talking about Real Estate Owned by a bank. These foreclosed homes are no longer thought of as dumps for investors to deal with; they are opportunities. These homes are sold as-is but many are in amazing condition and at tens of thousands less than the homes sold for just a year or two ago. Some homes are even new construction.

Can you say affordability? It is off the charts when you consider a foreclosed home! Check out this video which explains the 239% Affordability Index currently in the Twin Cities. (The music isn’t rock, but the information rocks!)

Today, interest rates continue to hover around 5%. FIVE percent guys…Your parents, aunts and uncles signed documents agreeing to over 300% more than the rate available in this market. What an opportunity for a buyer today!

In this internet age, first time buyers can prescreen houses online with photos, virtual tours and more. Less driving and more time viewing the homes you really want to see!

Now first time buyers are in the driver’s seat when it comes to representation too. You can hire a REALTOR® to represent your interests—Usually at no cost too! Since the early 1990’s, buyer’s representation has become a wonderful opportunity for home buyers to hire an agent to represent their interests. The seller still pays a commission which is split by both agents so there is no additional cost to have your own agent working for YOU!

And in 2009, first time buyers get an unprecedented $8000 tax credit to boot! This program isn’t going to last forever but if a first time home buyer (or someone who hasn’t owned a home in the last three years) buys a home between January 1, 2009 and November 30, 2009, they will get an $8000 credit on their taxes. There are a few details and restrictions (read more here) but most first time buyers will get to take advantage of this program.

First Time Buyers! What are you waiting for?

If you are the fence about buying your first home, thinking their might be a better opportunity coming, think again! This is a great time to be a first time home buyer. People who bought homes in the early 1980’s did okay even with all the disadvantages they faced. First time home buyers today have opportunities only dreamed of when REO was on the Top 40 charts. Don’t miss out…It won’t be long before your best chance at the American Dream is just a retro memory!

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Copyright 2009 Teri Eckholm http://www.terieckholm.com/

With No Nehemiah or Genesis for Homebuyers, What will Cause the First Domino to Fall?

Most people understand the concept of the domino effect on the real estate market. The starter homes must sell first so the owners of the starter home can move up to the next price level, which allows another home to sell and another; much like a child’s game of dominos.

Fortunately the real estate market has had continued to have a reasonable pool of first time buyers in the mix these past few months due to low interest rates, home prices and unique assistance programs. Early this year, the government gave the controversial but beneficial programs like Nehemiah and Genesis a reprieve. These seller funded non-profit organizations had been scheduled to be disbanded early in the year but were allowed to continue to fund first time buyers. These programs give buyers down payment assistance for FHA loans that require a 3% down. With additional assistance from the seller for closing costs, a first time buyer with a good job and credit score, is able to purchase a home without having to save up for a down payment.

The reprieve may be over. This weekend I read an alarming news release from a Minnesota mortgage broker pointing out how the Mortgage Bailout Bill could slow the recovery of the real estate market. The senate version of the new mortgage bail out bill will put a stop to all programs offering down payment assistance. They will in essence remove the finger that starts the first domino to fall. First time buyers will again be required to save up for that down payment. With prices increasing everywhere from the corner grocery to the gas station down the street, it will be a daunting task to become a first time homebuyer.

I expect that like in the 1980’s and earlier, young people will start saving again for that first home as soon as they graduate either high school or college. But back in the decades of big hair, 8-tracks and parachute pants, homes were priced more reasonably. It was much easier to save up 3% of $60,000 ($2,000) for normal Minnesota starter home in 80's than it will be to save 3% of a $200,000 ($6000) for a starter home at today’s prices.

So whose finger will give the push that starts the domino’s chain reaction in today’s real estate market? Loans funded by the Veterans Administration? That is one possibility. VA loans have always been available to those who have served in the armed services as a way to homeownership with little or nothing down. It is a very good program that I anticipate we will be seeing more service men and women taking advantage of in the future. But those who have not served will be forced to save.

Bottom line is the mortgage bailout will save some homeowners from losing their homes but at what cost? Will it delay the recovery of the real estate market? Only time will tell.

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If you are buying, selling or relocating to Minnesota and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation 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 2008 terieckholm.com

5 GREAT Reasons Minnesota Townhomes Make an Easy Transition from Apartment Life!

The low interest rates and recent reports have many apartment dwellers considering making a first home purchase. House prices are making buying a very attractive option for many who want the investment potential and tax benefits that being a responsible homeowner can provide. But some on the fence might not like the idea of cutting the grass every summer weekend or shoveling a driveway before going to work on a Minnesota winter day. These fence dwellers should consider a townhome and dive into the market to receive the benefits of homeownership but retain some of the worry free aspects of apartment life!

Here are five reasons that a townhouse might be the perfect first home:

1. No Yardwork! In most cases the association is responsible for all grass cutting, trash and snow removal.


2. No Exterior Maintenance! Painting the siding and putting on a new roof are decisions made by the homeowners association. Exterior hazard insurance is covered by a policy for the entire association and paid for with monthly or annual association fees.


3. Community Amenities. Want an inground pool? Like nature trails, walking paths and lakeshore living? Need a fitness center or large room to entertain in? Love the idea of living on a golf course? Amenities like these can be found in many northern Twin Cities townhome developments.


4. Close Neighbors Provide Better Security! Complaints of that nosy neighbor disappear when they notice that something unusual is going on next door and thwart a robbery in progress. People in townhomes live in close proximity to one and other, like those in apartments. This closeness can provide comfort to those who like the idea of neighbors looking out for one another.


5. More Space for the Money. In the price verses square footage scenario, townhomes win hands down for getting more space for the dollar. With less dollars being tied to the land, more of your money goes into buying actual living space. Townhomes are designed with space efficiency in mind, giving you more living area at a lower cost.

Need another reason? Townhomes are amazingly affordable throughout Anoka, Chisago and Washington Counties! The Minnesota townhome market developed too quickly in early the early 2000’s creating more supply than demand. Add to it the overall slow down in real estate, builders started making deals about two years ago from Blaine to Forest Lake and Wyoming to Coon Rapids to keep new developments selling. With builders making deals, traditional sellers have dropped their prices too. Townhomes are selling at unbelievable prices. Read More About Townhome Deals HERE!
Ready to get off the fence and buy a Minnesota townhome and need help from a professional Realtor? Give me a call or visit my website for a FREE Relocation Packet. I specialize in properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes, Blaine and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.
Copyright 2008 terieckholm.com