Essential Real Estate Terms: Fiduciary

Whether first time home buyer or seasoned homeowner considering selling, there are a number of real estate terms that are essential to know. Today's word is Fiduciary.

Fiduciary—A relationship of trust created when a home buyer or home seller signs a contract with a REALTOR®. After a contract is signed, a real estate agent has several fiduciary duties that protect their client, This fiduciary relationship is not only effective throughout the transaction; it continues forever. This means as a first time buyer, once a contract is signed with an agent, that agent cannot tell anyone anything that is private about you and your situation. In Minnesota, these duties require the agent to be loyal, confidential, and obedient with their client's lawful instructions. They are accountable to the client and must disclose any information they learn that would be of benefit in the purchase of a home. Throughout the transaction and afterward, they must use reasonable care to protect their client's interests.

It is important for a first time buyer to understand what a fiduciary is because every seller that is listed with a real estate broker already has a contract in place. This means when a buyer calls the listing agent for information or stops by at an open house, the friendly REALTOR® asking about your ability to buy a home is under contract with and WORKING for the SELLER. This agent has a fiduciary duty to disclose EVERYTHING you say to the seller of the home. But it is not a two way street. The friendly agent cannot tell you anything that the seller doesn’t want you to know (unless it is about the condition of the property). Because of their contract, the agent cannot say why the seller is moving or if a price reduction is in the works.

As a home buyer, it is essential to interview potential agents to assist with the home search as soon as possible in the process. When good match is found, sign a contract with a REALTOR® so that your interests and information are protected. Then your REALTOR® can make calls to other agents on homes, set up private showings and assist you through the homebuying process. The agent you sign a contract with will be working for YOU! 

What if you just met the agent and you are not certain you want to work with this particular person? The contract does not have to be a long term commitment. I often sign up new home buyers for a couple of weeks and extend the contract once we have formed a stronger relationship. Rest assured that even if you decide to part ways with your agent, the fiduciary duty to keep your private information private continues forever.


Need to know more about buying or selling an home in the Minneapolis/St Paul area? 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

Forget Diamonds! Happy Clients are a Girl's Best Friend!

January is the time of year that I play catch-up. I catch up on all the paperwork for my taxes. I catch up on all the miscellaneous stuff around the house that was put aside over the holidays. You get the idea. One such task was to ask several recent clients for feedback on my service. Sometimes I remember and do this right after the closings and sometimes it is put off for a bit.

So for about two weeks now I have been receiving some of the most awesome feedback from families I have helped recently. Here are just a few that I have received in the past few days. This kind of stuff really makes my day!

“Teri was such a tremendous help in both the sale of our house and the purchase of our new house. We met with another Realtor® before finding her that suggested the price of our home was significantly less than what we had hoped to list at. Teri came in and had the knowledge and integrity that we were looking for. She was always honest with us and we felt comfortable trusting her advice. She helped our house sell quickly at exactly what we were hoping to get. She also worked with us to find a new home. I was always able to get in contact with her and never felt that my questions were not heard. She worked very hard for us and we appreciated all that she did to help make our sale successful. It was truly a joy working with her and while I hope we won't be buying and selling for quite a while, I highly recommend her to anyone looking to do either. She is knowledgeable, trustworthy and has the integrity that can make a huge difference in your buying or selling experience." ~~Kirsten & Dillon O.

"Selling a house and dealing with divorce is a difficult experience . Teri helped me step by step including financial details , good recommendations , fast call back times with quick answers and admired honesty that made it a smooth transition. Teri also coordinated finding a new home in the requested area in the same month! I continue to live happily in my new home. If the need arises for friend or family to sell or buy I would not hesitate to recommend a knowledgable Agent Teri Eckholm." ~~Laura L.

"Teri is the best Realtor, and friend, a single lady could ever ask for! She walked into a tough market (2013) and a tough situation (aging parent, aging 1950s house, and multiple siblings). Teri handled herself with grace and professionalism, and offered words of encouragement to help clear a cluttered house. She also suggested common sense improvements that allowed for a maximum return on my mother’s shoestring budget. Her diligent homework in preparing the market analysis and square foot calculations, pinpointed the ideal list price. With her help, we were able to get it listed quickly and received a full price offer the first week on the market. Unfortunately, the first buyer backed out of the sale (for personal reasons). Yet, Teri always looked on the positive side and continued to promote the property amongst her vast realtor contacts; shortly after, my mother received a nice offer. The closing was a breeze, as most of the documents were prepared before schedule. Best of all, my childhood home was sold to a very nice young man with the energy and home improvement skills needed to take care of the house." ~~Lynnette Z.

It is so much fun to receive such great reviews and feedback from my clients, who as you can tell are now my friends.  

Read more client testimonials

READY TO MAKE A MOVE? 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

Real Estate Word of the Day: Assessed Value

First Time Homebuyer Real Estate Word is Assessed Value

So many real estate terms can be confusing to home buyers and sellers alike whether it is an acronym like FSBO or an often used word like equity or foreclosure. As a REALTOR® I am not surprised when that look of confusion comes over a buyer’s eyes when I mentioned escrow or earnest money. These terms sound so much alike when being bombarded with new terminology like, mortgage, deed, easement, appraisal, and association dues, etc. It is understandable that homebuyers that are more interested in room sizes and kitchen counters to be confused with the everyday real estate jargon like down payment or cash to close. This confusion is very understandable because for most people, buying a home is a once in a lifetime experience.

This REALTOR® jargon is so prevalent, I thought a First Time Homebuyer glossary of real estate terms might be helpful. From time to time I have been adding to this list of terms used often by REALTORS® in a series of posts. This way you can skip buying that big “how to buy a house” book or attending that First Time Homebuyer Class and have a quick resource at your fingertips. I am continuing the series with Today’s Real Estate Term:

Assessed Value (or Tax Value) Every home has a value assigned to it by the county assessor which is the assessed value. This value is updated on regular basis (usually once a year) and it is used for determining your property tax. This value should not be confused with an appraised value (value determined by an appraiser) or market value (value determined when listed on the market), since it is often a year or two out of date. Usually the assessor will determine a separate value for the land and the structures. This value does not add for landscaping which would be included in a values determined by appraisers and homebuyers.

 
Copyright 2013 www.terieckholm.com

Real Estate Word of the Day: Equity

From time to time I will be working with  home buyers and be struck by the confusion in their eyes when I talked about escrow or earnest money. These can easily be confused with other real estate and mortgage terms like down payment or cash to close. This confusion is a reminder that simple terms I use everyday as a REALTOR® might be unknown to others. It is totally understandable because most homebuyers do not buy houses everyday.
 
There are so many terms that could possibly confuse a first time home buyers and repeat home buyers alike, that I thought an online glossary of real estate terms might be helpful. From time to time, I have written about these essential terms. It is a series of posts for the first time home buyers where I explain some 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 and have a quick resource at your fingertips. Today’s Real Estate Term is:

EQUITY—The amount of ownership one has in a property is the equity. This means if a home is appraised at $200,000 and the homeowner owes the bank $150,000, he would have $50,000 in equity.

An FHA buyer initially has very little equity because of the very low down payment required for the loan (usually 3.5%). Whereas a conventional buyer, who puts down 20% or more on the home, will have a greater percentage of equity.

It is important for a first time buyer to understand this term because it can be used in property descriptions. A home that is in a “negative equity" position is a short sale. This means the homeowner owes more to the bank than the home is worth in the current real estate market.
Other real estate ads will describe homes as an “equity builder”. This is where a buyer can build equity in the home faster by making improvements like finishing a basement so the home increases in value more quickly than if nothing is done on the home.

Another term used by REALTORS® in advertisements is “sweat equity”. This is similar to an equity builder but often describes a home that could need significant work to bring the property to its full value.



 

 
Copyright 2014 www.terieckholm.com
 

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

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

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

So what’s a homebuyer to do? 

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

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

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

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

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

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

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

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

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

Copyright 2012 www.terieckholm.com

Holding your OWN Hand when Buying or Selling a Home!

Well over a decade ago, I was on a weekend shopping excursion with my family. Just as we were about to step off the curb into the busy parking lot of the local Target, I attempted to take the hand of my precocious son when he announced to my husband and I, “I can hold my own hand!” And being obstinate and still in that "terrible two" stage, he did.

He put one chubby little fist inside the other behind his back and attempted to step off the curb and into traffic. And like the mama lion I was, I stopped him by the scruff of his neck...well actually, the collar of his jacket.

Realizing his need for independence, we explained to our child the danger of his actions. (Hey Bud...A driver of a car cannot see a tiny person out their windows as they back up their cars.) We compromised. He was allowed to hold his own hand everywhere we went except busy parking lots and when crossing the street. Then he would be required to hold mommy or daddy’s hand or hang on to his brother's stroller for his own safety.

Holding your own hand is good in life but there are times when one must rely on a professional to help them through a new or difficult situation. As a real estate agent, I realize most clients want to “hold their own hand” through a transaction for the most part. They do it with the knowledge that when they will need to “step off the curb”,  I am by their side  ready to explain and guide them through every step of the process. Whether it is a question from a home seller about getting their home ready for the first showing or a first time home buyer wondering whether a townhome or single family home would be a better investment, I am there ready to educate and assist.  

A good REALTOR® knows it is important for the client to make the decisions—it is our job to guide and educate our clients through the home buying or selling process.

Copyright 2012 www.terieckholm.com