The Art of the LOWBALL offer on Real Estate—How Low is it Safe for a Home Buyer to Go?

So you have scoured the internet for the perfect home and you found it! But it is tens of thousands overpriced compared to similar homes. Is there an art to submitting a lowball offer in this changed real estate market? Where do you start? 10% less? 20% less? 50% less? And is it the percentage less than the original list price or the current asking price?

Welcome to the reality of the real estate market today! There is no one-size-fits-all answer on this one. It really depends.

As a REALTOR® working in the north and east Twin Cities metro for several years, I have seen my share of sellers who were insulted by a buyer’s offer. And not just in a market where buyers have the upper hand either. A decade ago, anything but a full priced offer was insulting. Buyers were afraid to request a few thousand toward closing costs lest the sellers would balk and accept the next offer in line. So buyers would skip inspections and write offers thousands more than asking just to get into their "dream" home.

Those days are but a memory now...Sellers throughout Anoka, Washington and Chisago Counties are anxious to sell. They know that they are competing with short sale sellers (those who have to sell and owe much more than their home is currently worth) and foreclosed homes. Few traditional home owners with “for sale” signs in the yard are naive enough to expect a full priced offer in this changed market.

The problem is that there are naive buyers who believe sellers are desperate to take ANY offer. But in reality most sellers can't or won't accept just “ANY” offer. An offensive lowball offer could put the buyers’ dream home purchase in jeopardy.

How to Coming up with an Acceptable Starting Point:

• Ask Your REALTOR® to do a Market Analysis for the Home. In this market, I always pull the comparables to see what has sold recently in the neighborhood before my buyers decide what to offer on a home. Many sellers are listing homes at or below current market value. If the home is properly priced, anything less than 15% of the current asking price could be considered an insult. Currently, in the Twin Cities market, most homes are selling for about 990-95% of asking price. This percentage does not include seller paid closing costs either which does reduce the net offer. By looking at the neighborhood comparables, my buyers better understand what offer will be considered reasonable.

Keep in mind that if you are working directly with the listing agent who is under contract with the seller, they cannot ethically prepare a market analysis for a buyer. As a dual agent (working for the buyer and the seller) they must remain neutral regarding price negotiations.

• Consider the Original List Price. If someone has come down 25-30% or more from when they originally put their home on the market, they have made improvements since listing to the condition and now the market analysis shows the home is priced fairly, writing an offer over 10-15% less could be insulting. If this truly is THE home for my buyers, we discuss whether it makes sense to offer closer to the asking price rather than hitting the seller with a lowball offer.

• The Overpriced Home. If the market analysis shows the home to be significantly overpriced and the offer will be more than 20-25% less than current the current asking price. I provide the comparables to the seller. Sometimes when the offer is accompanied by documentation to back up the offer, the seller is less offender especially when it is explained that these are the same comparables that will be used by an appraiser. If the home doesn't appraise, the offer will have to be renegotiated in most circumstances.


• Buyer’s Plans to Remodel and Update. Be careful when using documentation for changes that reflect cosmetic and personal taste. Many sellers will be insulted when a buyer’s offer indicates that they are offering tens of thousands less due to paint, carpet and other cosmetic changes that a buyer wants to make. If the updates are necessary due to age or wear, make note of the fact and consider whether the home is currently priced to reflect the condition or not. Slamming a well maintained and updated home to justify a low offer is insulting.


• Avoid Considering Price Paid for Home. Many buyers think that if someone purchased a home a decade ago they mus have tons of equity. This could be true but it is not a hard and fast rule. Many sellers have taken the equity out of their home for improvements or for other reasons. Keep the negotiations focused on the fair market value of the home.

Most sellers are in waiting impatiently for that non-contingent buyer to write an offer on their home. In most cases, they understand the market and have worked hard to prepare their properties to entice an offer. But buyers must think through their offers; the perfect starting point for negotiations must contemplated thoroughly. Discussions can go south very quickly between buyer and seller when the initial offer is deemed rude. If you want to try a lower offer to see how low a seller will go but are prepared to pay more, make sure a note or letter accompanies the offer saying this is a starting point for negotiating on the beautiful home and property...a little kindness often goes a very long way.


Copyright 2011www.terieckholm.com

It's Tornado Season! Understand the Risk of Loss Clause--Know WHEN a Contract be Cancelled!

Imagine for a moment the following scenario: After months of searching for the perfect place to call home, you wrote an offer on a picture perfect lakeshore rambler in Ham Lake, Minnesota. After a little negotiation, the offer was accepted and with the inspection over, you are on schedule to close in 60 days.

Three weeks prior to the closing, straight-line winds blow through Anoka County. Concerned, you drive up to your dream home and see that the picturesque oak trees that had given the home character have been uprooted. Worse yet, one of the huge trees fell onto the house severely damaging the roofline. You are devastated as this was no longer the dream home you wrote an offer on a few weeks ago. So, what happens now?
Risk of Loss is one of those "boiler plate" clauses on page four of the purchase agreement used most often in the State of Minnesota. Being preprinted, some agents and/or their clients will gloss over this clause but it is very important to understand, as is every other line in the document you sign to buy a home.


Line 147 clearly states that the risk of loss due to any reason whether an act of God or the acts of vandals will be the responsibility of the seller from the time the purchase agreement is signed until the date of closing. That means if there is a fire or accident the seller is required to bring the home into the condition that it was in at the time the contract was written and signed.

So if that temperamental decade old dishwasher goes out, the seller would replace it. If a neighbor backs over the mailbox at the end of your driveway, it is the seller who must repair the post and replace with a new one. Final walkthroughs are essential to ascertain the condition of the home prior to signing the closing documents. But what happens to those irreplaceable picturesque trees that have fallen on the roof?

Three weeks prior to a closing, there could be plenty of time for the seller to call their insurance company and have the home repaired. But is it the same house? And more importantly, does the buyer still have to buy the home? In a word, no.

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

Risk of loss can come up when buying or selling a home during severe weather season in Minnesota. In most cases the repairs are made quickly to both the buyer's and seller's satisfaction and the contract will close on time. But when the property sustains significant damage, the buyer has the option of continuing to closing or walking away from the deal. Boilerplate or not, Risk of Loss is an important clause to understand when buying or selling a home.

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

Ham Lake, MN Real Estate Market Statistics Mid Year 2008

Even though existing single family home sales in Ham Lake, Minnesota remained sluggish during the first half of 2008 the numbers show that homes are still selling. The Days on Market (DOM) statistic has stayed pretty consistent with 217 days as compared to 214 in the first quarter and 220 in the fourth quarter of 2007. However, homes in the higher price categories remain stalled.

For the first six months of 2008, only one home is in pending and one sold in the over $500,000 price category. While that three days on the market for the high price point looks like a bright beacon, it is not reflective of the actual market. Since DOM is based on sold properties and only one property sold, the number is an anomaly. The very low DOM for this price point can be attributed to one very unique home on Majestic Oaks Golf Course that sold as soon as it listed. This shows that unique properties priced correctly are selling but is not indicitive of the market when looking at whole picture including the market time of active homes.

Currently, active homes priced over half a million have an average CDOM of 257 as of 7/1/08. One property has been on the market over 600 days! With 67 listings currently on the market priced at $400,000 or more, Ham Lake continues to be over saturated with high end homes.

Lower priced homes under $300,000 are showing some good activity. If homes continue to sell at this current rate, we are looking at just over a year’s worth of inventory in the lower priced categories. In the $300,000-400,000 price range things are moving a bit slower with about 17 months of inventory but not a bad pace considering the changed market place.

An excellent opportunity remains for move up buyers. If you have a starter home in good condition and well priced, it should sell in a decent time frame. Move up buyers with sold homes have quite a selection of properties to choose from in the higher price categories. After 300+ days on the market, many homeowners and builders are ready to negotiate with a strong, non-contingent buyer!

Mid-Year Ham Lake residential real estate statistics for single family homes:

Under $300,000~ 54 Active Listings, 5 Pending Listings, 23 Sold Listings, DOM 184 (New Construction Subgroup ~ 1 Active, 0 Pending, 0 Sold)

$300,000-400,000~ 27 Active Listings, 2 Pending Listings, 10 Sold Listings, DOM 229 (New Construction Subgroup ~ 4 Active, 0 Pending, 3 Sold)

$400,000-500,000~ 30 Active Listings, 4 Pending Listings, 10 Sold Listings, DOM 287 (New Construction Subgroup ~ 3 Active, 1 Pending, 2 Sold)

$500,000 and Up~ 37 Active Listings, 1 Pending Listings, 1 Sold Listings, DOM 3 (New Construction Subgroup ~ 10 Active, 1 Pending, 0 Sold)

Lakeshore available in the City of Ham Lake:

6 Active Listings on Ham Lake lakeshore with prices ranging from: $259,900-$1,350,000

1 Home on Coon Lake
1 Home on Ham Lake
1 Home on Lake Amelia
1 Home on Lake Emily
1 Home on Lake Netta
1 Home on Little Coon Lake

**All Statistical information based on information from the REGIONAL MULTIPLE LISTING SERVICE of MINNESOTA, INC. for the period of 1/1/08 through 3/31/08.

Photo Featured Listing in Ham Lake, Minnesota: 15139 E Vermillion Circle NE, 55304

Other Anoka and Chisago County Listings:601 86th Lane NW, Coon Rapids, MN 55433
401 Village Parkway, Circle Pines, MN 55014
25797 Freeport Avenue, Wyoming, MN 55092

Articles on Ham Lake, Lakeshore and Minnesota that might be of interest:

• Where's the Playground? A Key to Parks in Ham Lake Minnesota


• Does "Minnesota Nice" Affect the Real Estate Market? "Yah, You Betcha!"


• Dreaming of Life on MN Acreage?--What YOU Need to Know Before YOUR Move!


• Affordable Minnesota Lakeshore

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

Simplifying your Move with an EZ Phone Number to Help Clean Up!

I hate automated electronic messages being left on my voicemail. Usually I hit delete before the first sentence is completed by the annoying mechanical voice. However, the other day, I actually listened to one that I received. It offered some pretty good information. It was from the Salvation Army offering to send a truck out to pick up donations.
In Anoka County, there are many charities offering pick up service for gently used clothing, furniture and household items. Many of these groups like the Vietnam Veterans, Disabled American Veterans, Lupus Foundation and Courage Center come on a designated route on a rotating basis. The organization will mail or call to notify homeowners when a truck in the area and ask if they have any items that they would like to donate.

The Salvation Army however is has a new tactic for getting donations of clothing and furniture. They left this message: Call 1-800-SA-TRUCK to arrange a pick up! Now that is an easy number to remember.

As a Realtor, I am often asked by sellers where to donate furniture and other household items. The Salvation Army is not only a great organization to consider, they have made it simple to remember how to schedule that pick up!

So after staging your home or if you have leftover items from your moving sale, donate to the Salvation Army by giving 1-800-SA-TRUCK a call. It's a great way to simplify your move!

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

Severe Weather and Real Estate—Understanding Risk of Loss

Spring storms and a busier real estate market are making life very interesting for MN buyers, sellers and Realtors! Just over a week ago, 400-500 homes sustained damage as a severe storm that spawned two tornados and devastated the Twin Cities north metro. Yesterday another storm blew through Minnesota. This time homes in the south and west metro were affected by hail and damaging straight-line winds. 2008 is setting up to be a very active storm season in the Land of 10,000 Lakes as more severe weather is already in the forecast for later this week. Will this affect real estate transactions? You betcha!

Even in this changed, buyer-driven market, spring is a busy time for Minnesota real estate. Current statistics showed the deadlock between buyers and sellers loosened earlier this year with many homes going into pending sale status in April.

My curiosity as a Realtor got the best of me. I looked at the devastated Hugo neighborhood with a real estate eye. So many homes damaged and destroyed—Roofs gone. Windows shattered. Vinyl siding looking like Swiss cheese. Trees toppled onto homes. It is an entirely different neighborhood than it was a couple of weeks ago. In this hard hit neighborhood alone, there were 6 active homes on the market and 4 homes in pending at the time of the storm. With all of the damage and in some cases, total devastation, no doubt the risk of loss clause will come into play in some, if not all, of these real estate transactions.

What is the “Risk of Loss” clause? What does it mean to the average home buyer and seller?
Risk of Loss is a “boiler plate” clause on page four of the Minnesota purchase agreement. Line 147 clearly states that the risk of loss due to any reason whether an act of God or the acts of vandals will be the responsibility of the seller from the time the purchase agreement is signed until the date of closing.

I wrote a post last August, Contract Cancelled—Understanding Risk of Loss, that explains the risk of loss clause in detail and what it means to anyone with a signed purchase agreement on a home that sustains damage. After the past few stormy weekends, this topic deserves to be revisited as a reminder to all home Minnesota buyers and sellers as we persevere through this turbulent summer.

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

Set the Stage for a Home Sale in a Buyer’s Market

Before the curtain is raised and the action starts with the first showing, the stage is set for the perfect home sale. Sure the market has changed but you want or need to sell your home! After reviewing websites all winter for the best of the best agent, you have called in the expert. The Realtor has reviewed the comps..actives, solds and expireds…and explained the perfect price point. A condition was noted: Get the home in picture perfect condition.

Here is where the storyline can change: Sellers chose to either embrace the suggestions of the Realtor or balk make excuses. Who will get a SOLD sign on their home first?

There is no magic to this market…Sellers MUST have their home prepared and set the stage for the sale. Homes are selling every day in the Twin Cities and throughout Minnesota. And contrary to public opinion, price isn’t everything…Condition and preparation are essential pieces of the puzzle that get that SOLD sign in the yard!

In the past few weeks I have done several pre-listing market analysis plans for potential sellers across Anoka County. Some were home owners who tried to sell their homes last year with a different agent and failed. Others were ready to make their move in this year’s spring market. All were left with my analysis and checklist of what would need to be done to get their home SOLD. Pricing was the easy part...Preparing takes time.

Last year my listing to sales ratio was 100%.


Yep…I sold every home that I listed last year. Half of the homes were relists…homes other agents could not get sold. Many of these sellers were not properly prepared the first time.

My first step in working with a seller is a pre-listing consultation at the client’s home. If they have been listed previously, I have the MLS information and photos from the previous agent. Throughout the visit, I share with the potential sellers, tips and ideas on what is working and what is not from a buyer’s point of view. I arm the home owners with a laundry list of things to do to set the stage for a sale.

If a home owner doesn’t want to do what I suggest, I won’t take the listing. I don’t want to waste a seller’s time or hurt my reputation. Most sellers do want their homes SOLD... so they listen intently, take pages of notes and we get the job done together!
Reasons Homes Don’t Sell
Inventory—Yes, there is a lot of inventory out there! If you decide to put your home on the market you will have a ton of high quality competition and you will need to take these homes into consideration. Depending on a buyer’s criteria for a home, there can be literally hundreds of homes for them to consider. How do you make your home stand out from the pack?
Price—Some properties will be priced lower for the square footage as there are many bank owned and distressed properties out in the market place. This can work to a seller’s advantage. Many buyers don’t have the stomach to deal with the problems and risk of buying a distressed home. Pricing a home to reflect the competition is essential. Your home doesn't have to be the cheapest home on the market to sell but it must appear to be a great deal!
Online Photos—There is a statistic being tossed around that estimates 80% of home buyers start their internet search online. In my opinion this is low. I would guess it to be more in the range of 90-95% of home buyers start the buying process online. Whatever the percentage, serious home buyers are scouring the internet and marking their favorites…from the PHOTOS! A bad photo will stop a buyer from viewing your home.

Staging—Some home owners just do not want to do the work to get ready. After visiting with a relisting client, their get ready for market“to-do” list can be just as long as a first time seller. I explain what needs to be done and why. Clean. Paint. Remove and pack belongings. Consult with a professional stager. These things must be done or the photos will look terrible. Since the internet photos are the core of today's successful marketing plan, it pays to do it right from the get go.

Exterior—Don’t ignore the entrance to your home! Add flowers…A wreath…A cute welcome sign…Dress up the entrance,trim back the foliage and clean up the driveway. Store the boat and camper in another location. Let me have a clean, clear, awesome shot of your home for that main internet picture!

**********************************************************************************

Featured Listing in Ham Lake, MN:
15139 E Vermillion Circle NE, Ham Lake, MN 55304

**********************************************************************************

Ready to set the stage to sell YOUR Twin Cities home 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 Teri Eckholm 

A Lowball Offer in Today’s Real Estate Market—How Low is it Safe for a Home Buyer to Go?

When is a lowball offer insulting? 10% less? 20% less? 50% less? And is it the percentage less than the original list price or the current asking price?

Well, my answer is it depends.

As a Realtor working in the north and east Twin Cities metro for the past several years, I have seen my share of sellers who were insulted by a buyer’s offer. And not just in a market where buyers have the upperhand either. A few years ago, anything but a full priced offer was insulting. Buyers were afraid to request a few thousand toward closing costs lest the sellers would balk and accept the next offer in line.

However times have changed. Sellers throughout Anoka, Washington and Chisago Counties are anxious to sell. They know that they are competing with new construction homes and foreclosed homes. Few home owners with “for sale” signs in the yard are expecting a full priced offer in this changed market.

In fact some situations may lead buyers to believe sellers will take ANY offer. But in reality most sellers won't accept just “ANY” offer. An offensive lowball offer could put the buyers’ dream home purchase in jeopardy.

How to Coming up with an Acceptable Starting Point:

• Ask your Realtor to do a market analysis for the home. In this market, I always pull the comparables to see what has sold recently in the neighborhood before my buyers decide what to offer on a home. Many sellers are listing homes at or below current market value. If the home is properly priced, anything less than 10% of the current asking price could be considered an insult. By looking at the neighborhood comparables, my buyers better understand what offer will be considered reasonable.


• Consider the original list price. If someone has come down 25-30% of the value of the home already and now the market analysis shows the home is priced fairly, offering 10% less could be considered insulting. If this truly is THE home for my buyers, it might make sense to make an offer closer to the asking price.


• The Overpriced Home. If the market analysis shows the home to be significantly overpriced and the offer will be more than 10% less than current the current asking price. I provide the comparables to the seller. Sometimes when the offer is accompanied by documentation to back up the offer, the seller is less offended.


• Buyer’s Plans to Remodel and Update. Be careful when using documentation for changes that reflect cosmetic and personal taste. Many sellers will be insulted when a buyer’s offer indicates that they are offering tens of thousands less due to paint, carpet and other cosmetic changes that a buyer wants to make. If the updates are necessary due to age or wear, make note of the fact. But slamming a well maintained and updated home to justify a low offer is insulting.


• Avoid Considering Price Paid for Home. Many buyers think that if someone purchased a home 5-10 years ago they have a ton of equity. This can be true but not always. Many sellers have taken the equity out of their home for improvements or for other reasons. Keep the negotiations focused on the fair market value of the home.

Most sellers are in waiting impatiently for that non-contingent buyer to write an offer on their home. In most cases, they understand the market and have worked hard to prepare their properties to entice an offer. But buyers must think through their offers; the perfect starting point for negotiations must contemplated thoroughly. Discussions can go south very quickly between buyer and seller when the initial offer is deemed rude.
Need help coming up with that perfect starting point for your home offer? 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

Beware of Décor! Tips to Declutter Your Home Prior to Listing For Sale!

As much as Location, Location, Location has been the number one real estate mantra for decades, decluttering and depersonalizing has to be a close second. But what is clutter? Hard to tell in this eclectic world! Martha Stewart has one style and theme restaurants another. Go into any TGIFridays throughout the United States and the décor covers almost every inch of wall space! No wonder when as an Anoka County Realtor, I make a that initial visit to a potential seller’s home my response can often be, “Oh my, we have some work to do!”

Americans have too much stuff! We have it on our walls and under our beds. We store things in our basements, closets, and garages. It is our history and our lifestyle. It is the way we live. But in order to sell your house, you must learn to live a different way at least while your home is on the market.

I visited a lovely Forest Lake area home recently that had been on the market all last summer. It was decorated to the nines! Beautiful oak and antique furniture sat in the bedrooms, living room, family room and even the foyer. There was 2500 square feet of furniture in a 1600 square foot house! The cozy home had a crowded feel and potential buyers would consider it much smaller than it really was. Their previous agent had not addressed the overpacked house situation at all. When I brought it up, the husband said, “But it is what makes our house our home”.

I completely understand this reasoning….But if a seller is serious about moving, they MUST pack up their treasures, mementos and photographs for their new home. If someone is serious about moving, the treasures will have to be packed sometime, why not now? When decluttering the property turns from the perfect home into “The Perfect HOUSE on the Market”.

• Store, sell or donate everything are not using! Clean out the drawers, cabinets, closets and garage too!



• Go for the minimal look in decorating! Use a rule of 3…No more than three pieces of décor in any direction.



• Take down the wall of family photos. People start looking at the family pictures rather than your house.



• Pay attention to the outside of your home. Too many bird feeders hanging from the trees, Little Tikes toys in the yard or plants covering the entry can be distracting in the MLS photos.



• Bring in a professional! If you are not certain of what to pack and what to leave out, hire a stager for a consultation.

Other articles on Getting YOUR Home Ready for SOLD!

Home Staging Tips to Help YOUR Home Sell in a Slower Market
Staging for a Quick Sale—Cleaning for a Buyer!
Moving with Pets--Important things to remember!
Top 10 Ideas to Get Your Home Ready to SELL!

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

Dispute Resolution—Understanding Arbitration in Minnesota Real Estate

This past week I received an email from a reader of my blog who was upset after receiving an arbitration ruling that did not go in his favor. He had read one of my past posts What is a Septic System? How does it differ from a city sewer system? He and his wife had recently purchased a home in Andover, Minnesota and filed for arbitration after discovering a significant problem with their septic system and that the disclosure forms their received were incomplete.

The arbitrator ruled in favor of the sellers, agent and broker and the frustrated homeowner doesn’t understand how this could have happened. He strongly cautioned me to never let my buyers agree to arbitration. I don’t know all of the details of his situation but he was obviously frustrated with the system.

Fortunately, I have not had any clients with outstanding disputes following closings that lead to arbitration or litigation. When clients on both sides of the transaction take the time to:

• Disclose all defects in the home
• Perform all inspections
• Opt to purchase warranties if necessary
• Review all documents
• Discuss any and all aspects of the home honestly and thrououghly

Then buyers have a good understanding of what they are purchasing and the limitations of the existing home. Good honest disclosures will prevent most disputes.

If you are considering buying or selling a home in Minnesota will be confronted with the question, “Do you agree to arbitration?”
It's a tough question as most clients do not understand the system they are agreeing to when they receive the disclosure form. Disputes can arise in real estate transactions, so understanding the process of arbitration is essential prior to sitting down to sign the purchase agreement.

When we purchased our first home, prior to my becoming a Realtor, I remember the explanation of the arbitration system given by our real estate agent. “It’s an inexpensive alternative to the legal process and frankly anyone who doesn’t agree to it is a fool as an attorney can cost thousands more.” We couldn’t wait to sign the form.

As a Realtor, I am more diligent when explaining this arbitration system. Though I am not an attorney and cannot give legal advice, I am required to explain this document to my clients. Here is a synopsis of what I say when I explain this form:

“When there is a dispute after the closing, buyers and sellers can choose to arbitrate or litigate for a resolution. By signing the arbitration form, you give up your right to litigate and agree to binding arbitration. Though parties can hire an attorney to assist them with the process, they cannot take their case to a court; they must file a request for arbitration. After the arbitrator makes a ruling, all parties MUST comply with the findings of the arbitrator.”
In Minnesota, the arbitration system for residential commercial property is Construction Arbitration Services (CAS). In reviewing the CAS website, I discovered that hiring a team of arbitrators is not inexpensive. While for small situations under $3000, the fees are relatively low, starting at $250 for one arbitrator to review documents, the numbers are significantly higher for larger claims. If you want to speak with the arbitrator to present your case, the cost jumps to $650 on a case under $3000.
For the situation described above, one arbitrator for a three party case would be $1,200-$1,500 and hiring a 3 member panel would be nearly $2,500! The party bringing the claim would be required to pay the amount upfront for the service and would only receive reimbursement if the decision was in their favor. The arbitrators are not employees of CAS but are neutral third-parties trained in dispute resolution and could be anyone of a number of trained professionals from a variety of backgrounds.  


So what should a buyer or seller do when confronted with this form, sign or not sign?

Again, I cannot give legal advice but a popular option is to decline signing at the time of writing the purchase agreement. This is not an outright refusal to ever agree to arbitration. It is a way to keep your options open in the event a dispute arises. This way a buyer or seller could chose to hire an attorney, file for arbitration or present your case to a small claims court judge if need be.



***************************************************

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

Anoka County Foreclosures Rate Highest in Metro—How Does this Affect Homeowners?

Another housing report and more bad news; foreclosures are up in Anoka County. In fact, Anoka County ranks in first place in the 13 county metro area for foreclosures at 1.57% according to article by Paul Levy on StarTribune.com, Housing Crisis Hits Hardest in Anoka County. Does this come as a surprise?

Maybe for some, but there are some factors that could help explain. Anoka County is one of the largest counties in the metro with a southern border to Hennepin County where the foreclosure rate has been on the rise for many months. Add this to the housing development explosion all over Anoka County in the past 5 years in communities like Andover, Lino Lakes and Blaine. During this time period, many first time homebuyers took advantage of the zero down programs and adjustable rate financing to maximize purchasing power and possibly purchasing more than they could afford. With balloon payments coming due on these programs, rates rising and property values stagnant or in some cases falling, there is no refinancing safety net. Foreclosure is the ONLY option for those who are over extended.

So how will high foreclosure rate affect the property values of other homeowners in Anoka County?

Two factors give this situation a little more perspective:

1. Real estate is local and Anoka County is a BIG county.


2. The foreclosure rate less than 2% means that 98% of homes are NOT in foreclosure.

Sounds a little better right? Before we get too excited, we have to remember that some specific communities may be hit hard. If you live in a neighborhood where several of the homes are in the foreclosure process, if will probably have a negative affect on the value of your home. Families facing foreclosure often do not have the funds to keep up their homes so when the foreclosure process is complete, the bank has to sell at a discount to find a buyer. Banks don’t give away these homes so property values won’t plummet but they are not getting top dollar either.

If you don’t have to move over the next three to five years, you should be okay as this downturn should balance out in time. However if you need to sell your home this year, it is more important than ever to have good expert advise from someone who knows the community where you live.

Understanding and assessing the neighboring property values and positioning your home to compete with foreclosed homes for sale will take knowledge and expertise of a Realtor who works to sell homes in your specific community every day.

*****************************************

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

I Want it NOW!—Immediate Gratification is a Good Thing in Real Estate

This is a world of immediacy…We drive thru for instant food. We communicate with instant messages. We are trained for immediate gratification. It is recommended in today’s changed real estate market that people SLOW things down. And this is great advice when it comes to most parts of the home buying transaction but when it comes to possession, immediate gratification is best.

Immediate Possession is a very good thing for both the home buyer and home seller. In Minnesota, possession time can be negotiated, but it is in everyone’s best interest that the buyer be given the keys and complete possession of the property at the time of closing.

As a Realtor who works with first time buyers, move up buyers, downsizers and everyone in between, I have balanced the moving day obstacle for clients on more than one occasion. When there is a chain of sales in one day…i.e. The first time buyer buys the home from a seller who then goes to the next closing to become a buyer who buys the home from a seller who will go to another closing…You see where I am going here. This moving chain can have kinks in it when sellers don’t understand possession.

Minnesota purchase agreements allow the possession time to be negotiated. When working with a buyer, I always recommend that we ask for immediate possession at the time of the closing. When reviewing a purchase agreement with a seller, I always recommend immediate possession. (See a pattern here?)

This way when buyers go to the final walk through check out their soon-to-be new home, they can drive directly to the closing, sign the papers and get the keys. The seller being out of the home prior to the walkthrough limits the opportunity for damage or other conflicts to occur.

On occasion, the seller might request 24 or 48 hours after the closing to have all property removed. If a buyer agrees, this can cause problems for the buyer and seller. Here's why: the buyers now own the home and it is their homeowners' insurance at risk. What if something is stolen or damaged? Who is responsible and how is it resolved when there is a loss and the transaction is complete? Unfortunately, there is no easy answer and the situations can get ugly and end up in court.

Here are some situations that I have heard of occurring from other agents when possession was not immediate.

1. Pets left unattended in home. Sellers arrived to the closing and told the buyers they would need to stop to pick up the last load of laundry and their dog after the closing. They were going to use the electronic entry to get into the home. The buyers said okay as they had to do errands prior to moving in. When they arrived, the seller’s dog had been left unattended in the second bedroom for several hours and had soiled the light colored carpet. The sellers did not clean it up and left as a welcome gift for the new home owners.


2. Take your time! Though immediate possession had been written into the purchase agreement, at the closing the sellers and buyer started talking as there were a few items that had not yet been removed. The buyers gregariously told the sellers to take their time as they were tied up and wouldn’t be moving in until the following Monday. When they arrived at their new home several days later, the seller had left all of their garbage inside of the garage and the every door to the home unlocked. Luckily the home had not been damaged but as it was very warm, it took several days for the garbage odor to be completely removed from the residence and the buyer was stuck paying for the trash removal.


3. Squatters! Buyers for a large family home were agreeable to allowing an additional weekend for the sellers to move the remaining personal items to their new home a few houses down. Then the buyers had to come over several more times as the sellers refused to relinquish the extra keys. It wasn’t that they weren’t moved in to the new place nor needed more time to get their possessions; they just sat in the driveway of their old home drinking beer with the neighbors for several evenings until the agreed four day possession time ran out. During this time they flat out refused to let the buyers into their new home.
   

I could go on and on here but you get the picture. Immediate possession prevents problems from occurring. Sure in the first two instances, if a buyer had not agreed to arbitration, they could go to small claims court to get reimbursed for the damaged carpeting or trash removal fees. But that is not the point. When these situations occur, the buyer’s dreams of homeownership have been tainted! After weeks of waiting to move into their perfect home, having a previous owner with lack of sense and compassion ruin the final step is quite a blow. Immediate possession prevents 99% of these situations. Concessions can be negotiated at closing if the final walkthrough doesn’t go as planned but once the paperwork is signed, it is up to the legal system. Prevention is preferred.

So slow down when reviewing the details of buying a home but insist on immediate possession when getting into your new property. It protects buyers and sellers in the transaction. In particular part of the home buying process, immediate gratification is a very good thing!

*************************************************

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

Why Pay a Home Buyer’s Closing Costs?

When I list a home for sale, I give always give the seller a net sheet with estimates of closing costs that will be associated with closing the home. One of the items on the list is “Seller contribution to the Buyer’s Closing Costs.” Every now and again, I hear a seller scoff at this item on the list and get a response to the effect of, “I don’t want to pay my own closing costs. Why would I want to contribute to the BUYERS?”

I love when that question is asked. The answer is very 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 of Anoka County and the north metro Twin Cities, I see these closing costs will run anywhere from $3000-$7000 for a first time buyer. Couple this amount with a required down payment and few buyers have the funds to purchase a home.

So buyers 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 a good, 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 sold in this changed real estate market. Understanding the process is simple with the assistance of a knowledgable real estate agent!

************************************************

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

Avoid Being “The Biggest Loser” in this Changed Real Estate Market!

For the past couple of years now, the term “Buyer’s Market” has been synonymous with the real estate market. Obviously this is the opposite of the “Seller’s Market” term that had been used for the prior decade. I too, tossed around these descriptions until recently. A few months back, I decided when I use these terms I negatively affect half of my clients.

A buyer’s market, defined as a market with many sellers and few buyers, gives the impression that all buyers are winners making the sellers the losers. Likewise, in a seller’s market, with fewer sellers than buyers, there was an implication of the sellers getting the upper hand in every deal.

But here’s the rub: In this market, not ALL sellers lose and not ALL buyers win.

A seller that purchased a home in the early 1990’s, maintained it properly, diligently made payments and didn’t refinance out all of their equity can sell a home today at a handsome profit. This seller is in no way a loser.

A buyer who purchases a foreclosed home from a bank without a disclosure for a price well below the value of neighboring properties then discovers toxic black mold in the walls costing, a failed septic system or cement in the plumbing with unexpected repairs in the tens of thousands is not a winner.

These situations are part of today’s CHANGED real estate market. Yes, that is how I describe the market now. I avoid the phrases, “buyer’s market” and “seller’s market” and used "changed market" instead. Face it, the market has changed. But there can be winners on both sides of the transaction.

Here’s a case in point: A savvy young couple, who wanted to take advantage of the glut of new construction models on the market last year in the Forest Lake area and sell the Anoka County starter home they had outgrown, were winners! They negotiated with a major builder on a perfect model and saved over $30,000 on the price. Then after making all necessary repairs, they listed their home at a rock bottom price equal to what they had paid for it four years earlier, and sold it in less than 60 days.

Did they lose money on the sale of their previous home? Probably. But this educated couple realized they were not losers. Their gain from the builder far outweighed the money they lost on their sale. Had it been a hot “Seller’s Market” they might have sold their starter home for a few thousand more but the builder would never have negotiated the drastic price reduction. All parties in this transaction were winners all the way around…The buyer of the starter home got a great deal. The move up couple sold quickly and got and awesome deal. The builder reduced their home inventory. Win. Win. Win.

This is just one example of the success stories I have witnessed this past year in this CHANGED real estate market. I know of dozens of examples of other individuals and families, both buyers and sellers, who are winners in this market.

Is it your turn to be a winning home buyer or home seller? If you are thinking that now is the time to make a move but the constant gloom and doom of the media has you sitting on the fence about buying or selling, contact a Realtor to help you assess your situation. Getting professional real estate assistance from the get-go is the best way to win in this changed market.

The young move-up couple in the previous story had contacted me months prior to finding their dream home to figure out a plan of action. I give sellers throughout the north and east Twin Cities metro area realistic facts about how to get their homes ready and where they need to be priced. They were prepared and ready to negotiate realistically with buyers when an offer came in on their property.

Sellers who are upside-down with their mortgage can also be winners in this market. Being upside-down is when you owe more money on a home than it would sell for on today’s market. Working with a Realtor that knows how to work with a bank to negotiate a short sale for their home and save their credit rating is a win for that seller. A foreclosure on a credit rating will become a huge red flag that will stay on your credit report for nearly a decade.

When I meet first time buyers, I give them a packet of information on how to buy a home so they are prepared for what to expect in the process. Before we start deciding whether to look at homes in Forest Lake or Hugo, I make certain my buyers are pre-approved for a loan with a reliable mortgage broker who will get the job done. Clients understand exactly what they can afford and what their payment will be. Then I discuss with my buyers the opportunities and pitfalls when looking at foreclosed homes, short sales, new construction and owner occupied homes. Prepared clients are then ready to jump on the perfect house and when the situation arises. With my expert assistance, buyers understand how to finesse a low offer as a starting point to negotiations so they can get their dream home at a price acceptable to both parties.

Are you ready to make a move? Team up with a great Realtor and get educated! Whether buying or selling a home in today’s market, there is no reason to be the biggest real estate loser. Win-win sales are possible and are my goal in every transaction!

**********************************************************************************

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

Thinking Outside the Box to get your Home SOLD!

You’ve seen the statistics! You know that the real estate market is down across the nation. Sellers in the 2008 spring market will be fighting to be noticed in a sea of foreclosed homes, builder’s models and investor’s flips. So what can you do to make your home stand out and get noticed? What little trick might give you an edge? Maybe it is time to think outside the box!

THINK Feng Shui

Using the ancient Chinese discipline of Feng Shui to create balance and a flow of energy throughout the home may get it sold more quickly. Before dismissing this concept as a bunch of malarkey, look closer. Removing clutter is one of the key ways to get your home sold and a cornerstone of Feng Shui. The flow of energy or Chi through the home determines how the buyer feels when they step inside the home. A home with a balanced Chi will invite the buyer to linger longer in the home. As a Realtor, I know showing homes there are some properties that “just feel right” from the moment you step over the threshold. Buyers literally languish in certain homes absorbing the atmosphere.

Improving your home’s energy using Feng Shui might be as simple as setting intentions. Write down your selling mission and place in an affirmation box. Or, take that first ad or the MLS listing sheet and write SOLD across it. Place this where you will see it everyday like your wallet or your car’s dashboard and reaffirm that your home will be sold.

Delve deeper into Feng Shui and discover if the five elements are out of sync for your property. Fire, earth, water, metal and wood should be represented in colors or objects and balanced to keep the positive energy flowing.

If your home’s Chi is really out of whack, consider an online Feng Shui consultation with an expert. Carole Provenzale, owner of Feng Shui Long Island, could be just the ticket to getting the energy balanced and your home sold in this changed real estate market.

THINK St. Joseph

St. Theresa way back in the 1500’s started something big when she needed to find additional land to build convents. She buried a trinket and prayed to a saint. Not just any trinket or saint, she prayed to St. Joseph, saint of the home, and encouraged other nuns to join her with prayers. They buried St. Joseph medallions back then, but now a statue is in vogue. Kits are available with a small statue of the saint and directions on how to properly bury the figure in your front or back yard.

THINK Expert Real Estate Assistance

While I have no statistics on whether ancient Chinese or Catholic beliefs help to sell homes, I do know that receiving expert advice on pricing and preparing your home for sale are the tried and true ways to success. Online sites like Zillow are a great way to get started with a ballpark idea of your home’s value. But this is not the market to play around with rough guesses and selling by owner. You NEED expert advice; A Realtor® who shows homes and writes offers in your neighborhood on a daily basis to provide you with an accurate marketing analysis for your home. Your real estate agent can give advice on getting you home ready to sell including everything from basic staging to expert Feng Shui. And most importantly, they can get your home price right in this changing real estate market so that your home is one of those SOLD this spring!

Need an Expert Market Analysis for a home in Ham Lake, Lino Lakes or other community in the Forest Lake school district? Click Here to set up your FREE Listing Consultation.

*************************************************************************************

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

Tale of Two Headlines—City Water and Sewer for Ham Lake?

A day or two before Christmas, our copy of the January 2008 Ham Laker Newsletter arrived from the City of Ham Lake. I noticed it nestled between the holiday cards and did a quick glance over the headline, “Please Answer our Community Survey”, before tearing into the envelopes that held the photos, wishes and good tidings from our family and friends. It wasn’t until the Christmas gift wrap had been cleared that I had a chance to sit down and actually read it.

Being a Realtor who likes to blog to keep residents informed on Ham Lake and Anoka County, I read every issue of The Ham Laker cover to cover to get the news from the city council meetings and community. Luckily even though the January issue was poorly timed, I did not make an exception.

On closer examination of the story on the community survey, I read the words, “financially feasible sewer and water system.”

Hmmmm…I had heard that there was talk about developing the corner of Highway 65 and Crosstown for additional commercial development. I had read about the task force of 30 people that were investigating options. Reading further, I became a bit concerned as I read between the lines, it sounded like they were seriously considering bringing city water and sewer into Ham Lake and implying it would lower our taxes.

Looking closely at the map, the proposed area included areas around Coon Lake. I was becoming mildly concerned.

A few days after the New Year, the January issue of Lakes and Loons arrived. This year old privately funded publication has been giving a different side of the news since it’s inception first issue. Their headline was not a bit vague. Ham Lake Sewer District: $75 Million…Plus Interest

Ouch…The Ham Lake city council was not just considering a northern city water and sewer system, they were talking numbers. Reading the article was eye opening!

• The task force is not made up of Ham Lake residents.


• No citywide vote is scheduled for this massive change to the Ham Lake community.


• A community center is being considered along with walking and bike paths.


• High density housing would be an option in areas where the city utilities are available.


• Several proposals are being considered to pay for the proposed city utilities. One funded completely by developers.

Now as a Realtor working in Anoka County, this concerns me. People consider Ham Lake because of the rural life style and close proximity to the city. These changes will have an immediate affect on property values. Right now, any homeowner in Ham Lake would have to disclose to a buyer that city water and sewer are being discussed as an option. This could deter a buyer from considering a purchase of a home as the costs to abandon a septic system, seal a private well and connect to public utilities will run into the tens of thousands of dollars. How do you escrow for unknown assessments and costs?

With current time on the market for a Ham Lake home being counted in months not days; this is going to be another blow to the Ham Lake home seller. View 4th Quarter Ham Lake real estate market statistics here.

If your Ham Lake home is not in the area where the public utilities are being considered but you live nearby, your home value can still be affected. I have sold homes in Centerville, Lino Lakes, North Branch, Forest Lake and Wyoming with septic systems in close proximity to homes with city water and sewer. It is a tough sell when you have a well but your neighbors have city water. And the situation is the same with a septic versus public sewer connection. There is always a perceived threat that the homeowner might be forced at some point to connect to the system.

Though, I have few answers and many questions about the water/sewer proposal for Ham Lake, I do have some advice to Ham Lake residents. Read both of the articles* and Mike’s Musings “Sewergate” editorial and make your own determination on the situation. Make it a point to attend the council meetings. Take the survey and give your comments on the situation. Get educated. This WILL affect Ham Lake property values and taxes and the affect will begin immediately.

*I provided a link to the Ham Laker Newsletter page but as of today, the January 2008 issue is not available on-line.

Lakes and Loons Survey for Ham Lake Residents

*******************************************************************

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

Contract Cancelled—Understanding Risk of Loss

Picture the following scenario: After months of searching for the perfect place to call home, you wrote an offer that was accepted and will be closing in 60 days.

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

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

Line 147 clearly states that the risk of loss due to any reason whether an act of God or the acts of vandals will be the responsibility of the seller from the time the purchase agreement is signed until the date of closing. That means if there is a fire or accident the seller is required to bring the home into the condition that it was in at the time the contract was written and signed.

So if that temperamental decade old dishwasher goes out, the seller would replace it. If a neighbor backs over the mailbox at the end of your driveway, it is the seller who must repair the post and replace with a new one. Final walkthroughs are essential to ascertain the condition of the home prior to signing the closing documents. But what happens to those irreplaceable picturesque trees that have fallen on the roof?

Three weeks prior to a closing, there could be plenty of time for the seller to call their insurance company and have the home repaired. But is it the same house? And more importantly does the buyer still have to buy the home? In a word, no.

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

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

If you are relocating to Minnesota, are looking for Homes for Sale in the north and east Twin Cities metro area and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation Packet. I specialize in acreage properties! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2007 www.terieckholm.com

Doctor! Doctor! Give Me the News! I’ve got a Bad Case of Real Estate Blues

Have you ever noticed how people out there want a quick fix for everything? Think about how many informercials and products out there guarantee quick and easy weight loss. Consider those who took Fen-Phen or have tried the new Alli fat-blocking product. Trading a heart attack or serious gastro-intestinal problems for a healthy weight, isn’t a good tradeoff. Talk to an educated professional dietician and you will begin to understand there is no magic involved to long term weight loss. Good old fashioned hard work is the secret to success.

Similarly, there is no pill to kill the ills of the real estate market woes. Sell quick schemes and guaranteed sales programs are no replacement for preparation. Consult with a professional Realtor and there will be no gimmicks to replace the good old fashioned hard work that will get your home sold. Partnering with a highly qualified professional to price and prepare your home for sale is essential in this changing market.

If a real estate offer seems too good to be true, you need to look it over carefully and examine that fine print. A claim of “sold in 120 days or I will buy it” doesn’t look so great when you will be selling it to the agent for 80% of the appraised value of the home and the selection of the appraiser is at the sole discretion of the real estate firm. A company that offers to buy your home directly and will close in days for cash has a certain appeal to those desperate to sell. Again, peruse that fine print very carefully as the fees may be surprising and not such a great deal to the average seller.

The best option is to skip the magic pill mentality and roll up your sleeves! If you really want to sell your home in this market, here is a simple 3 step approach to kick the real estate blues:

Step 1: Partner Up! It is imperative to team up with a professional agent to get your home ready and priced right. Find someone who lists and sells homes in your community. Don’t choose your best friend from college who just got their license or the wife of your coworker who lives on the other side of the Mississippi. Pricing is critical and understanding the marketplace can vary from neighborhood to neighborhood. Sure, your brother-in-law’s mom who lives and works mostly in Wisconsin may have a Minnesota real estate license, but does she really know anything about Forest Lake?

The selling process still will take time. In the Twin Cities north metro and Anoka County, homes are taking an average of 120 days to sell. Unprepared homes and improperly priced properties can sit for well over a year on the market.

Step 2: Fix everything! Yes, EVERYTHING! The 20 year old roof. The dripping faucets. The missing doors. The dingy carpeting. The outdated wallpaper. Everything needs to be repaired and replaced.

When a buyer has 20-50 homes that they can purchase, if you want them to consider yours, you need to remove every potential deterrent to writing an offer.

Curb Appeal is a Must! Your home must look AWESOME from the street!

Step 3: Pricing is Critical! The most important decision you will make in the process of selling your home will be determining the original list price. If you are too high, you will lose potential clients and increase your time on the market. Pricing a home correctly from the get-go is essential. If your real estate agent shows you sales comparisons from 3 months ago but you insist on using last year’s refinance appraisal, you are not working on the same team.

Most real estate markets have changed since the beginning of 2007. Changes include the amount of foreclosures in the community, new developments that are offering crazy incentives and fewer approved sub-prime buyers, have affected the marketplace drastically. Find a professional Realtor that knows your community and listen to their educated pricing opinion. It might be a bitter pill to swallow but to sell your home; you need to hear the truth.


More Articles to Get YOUR Home SOLD:Top 10 Ideas to Get Your Home Ready to SELL!
What is your Realtor’s List-to-sales Ratio?
Looking "HOT" From the Street—Tips for Curb Appeal
Does "Minnesota Nice" Affect the Real Estate Market? Yeah! You Betcha!


If you are relocating to Minnesota, are looking for Homes for Sale in the north and east Twin Cities metro area and need help from a professional Realtor, give me a call or visit my website for a FREE Relocation Packet. I specialize in acreage properties! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2007 www.terieckholm.com/