Hey Harold—Grab that Purple Crayon and Draw a Dream Home!

When I was in grade school, I loved reading the story of Harold and the Purple Crayon. It was a picture book written by Crockett Johnson. I wanted to be like that little bald kid who drew out his dreams in his footy pajamas. Though not fond of the color purple, I always wanted one of those special violet Crayola type sticks to draw what I was dreaming of! Imagine if life were only so simple…





Today many people are sitting on the fence dreaming about their perfect home but aren’t certain that they have the tools necessary to take advantage of this unprecedented $8000 tax credit for first time buyers and amazing affordability in the Twin Cities home market. Maybe they are looking for one of Harold’s purple crayons too so they can draw out a path to a perfect new home…

Draw YOUR perfect REALTOR® Grab that magic purple crayon and sketch out your ideal of a trusted professional REALTOR®. The first step in owning a dream home is to find the agent of your dreams to represent you throughout the process. Make certain to sign the buyer’s representation agreement for with a blue ink pen not a purple Crayola.

Draw Your Preapproval letter. Pre-approval is an important step before you begin looking for a home. It not only determines how much home you can afford to spend on a home, it guarantees that you are ready to write up the offer when you find your dream home. The letter will serve as notice to the sellers that the bank has committed to lend you a specified amount based on your financial history. This gives you significant buying power as a seller recognizes you are approved for a loan. Your professional REALTOR® can assist you in locating a qualified loan officer that will work with you to make your dream home a reality.

Draw YOUR perfect home! Draw YOUR perfect home! Here’s the drawing you have been waiting for...glide that purple crayon across the page and sketch out your dream home. Your perfectly depicted purple REALTOR® will set up an MLS search for homes that meet the needs and price you have drawn up. As perfect homes hit the market, showings will be set to view the homes in person.

Draw up a Purchase Agreement and happy seller! Draw up a Purchase Agreement and happy seller! Use that magic purple crayon to draw up a contract on your dream. Okay the contract will have to be completed in something other than that crayon, but here is where you draw up contract including all of the details such as what you want to pay for the home, what personal property is to be included as well as the date you want to close and move in.

Draw a Qualified Inspector. To be certain that you didn’t miss any important details when you sketched out the beautiful purple palace, draw a home inspector that is qualified to check out your new purchase.

Draw up a SOLD sign. A big purple "SOLD" sign will announce to the world that this is YOUR dream home! It will stay on the sign while the home is "pending" the closing. During this period prior to closing, your purple professionals work closely together to ensure that details such as the appraisal and updating the title are handled in a timely manner. It is your job to use your purple crayon to mark off the days until you get to the closing table!

Draw the Keys to your new front door! Draw the key to your new front door! One final purplish piece of art will complete the home buying process—Sketch up a set of house keys! When closing day arrives, be prepared to attend with your state issued picture identification, a 10 year address history, your checkbook, and all other information requested by the closer. At the end of this hour meeting, you will be handed the keys to your new home.

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

Foreclosure Disclosure in Minnesota—Despite Regulations, It is Still Buyer Beware!

Wise men say; only fools rush in…Wait a sec. I know that classic song is about falling in love. But since many home buyers do “fall in love” with a home and become a bit foolish, it applies.

A few weeks ago, I was with a couple who went a bit gaga over a bank-owned foreclosure listed by one of those agents specializing in REO homes. I’ll admit, this was an amazing home: Nice floor plan….Picture perfect condition…Terrific View…And a “just reduced” price tag that put the home in the category of phenomenal deal!

These buyers were not first time buyers, having bought and sold several times before, my clients were a bit savvy and wanted to write an offer on the spot. As their buyer’s representative, I advised them that the instructions from the listing agent required any interested parties email for instructions on how to write the offer. Offers not following the specific instructions would not be presented or accepted.

I sent off the email to the listing agent and momentarily received a return email with a 15 pages attachment with step-by-step instructions as to how the buyer’s agent was to fill out the purchase agreement so buyers could, among other things, sign away all of their rights to disclosures.

Some of the instructions were just plain crazy! For instance, the buyer could inspect the home but not turn on the water if the home has been winterized. How can a home be properly inspected without water? This home was on city water and sewer, but had the home had been on a private sewer system with a well, we are talking about some big ticket, critical components of a property, without a disclosure or ability to inspect.

As it turned out, I didn’t have to write an offer for this particular REO home. I did not have to explain to my clients how all the restrictions for an acceptable offer on this home would be slanted totally in the banks favor while put them as buyers at serious risk . Paraphrasing another musical classic, “you can’t always get what you want but sometimes you get what you need”; we received an email that another offer had been accepted. It was a solid, cash offer and no backups were being accepted.

Long story short…First priority was finding my disappointed buyers another home. My philosophy: There is ALWAYS another home. And sometimes the second home is much better. Within days, another better home was found.

But for me, the memory of the 15 pages of instruction manual remained. In fact, this was so alarming to me I kept the printout. I have sold other foreclosed homes where the agent did not spoon-feed the directions on how to write the purchase agreement. In other cases, the buyers requested the water be turned on prior to the inspection contingency timeframe counting. As my buyer’s representative, I discussed the specific terms as we wrote up the agreement and though a few standard instructions were indicated, like a special warranty deed is required and personal property cannot be part of the agreement, it is not always required with a litany of instructions to completely slant the sale to where the buyer must take an incredible risk.

Since 2002 there has been a mandatory seller’s disclosure statement in Minnesota requiring sellers to share all pertinent information to buyers of a home. The disclosure must be made in good faith and include all material facts pertaining to the adverse physical condition of which the sellers are aware that could adversely and significantly affect an ordinary purchaser’s use and enjoyment of the property and any intended use of the property which the seller is aware. The law does provide alternatives to the disclosure for those sellers who have not lived at the property like when the home is bank owned or is part of an estate. Sellers can have an inspector view the home and provide a written report of the condition. Or they can ask a buyer to sign a waiver that says the seller is unaware of the condition of the property and that they buyers waive their rights to the disclosure.

When buying an REO or bank owned home a buyer must be prepared to waive their rights to disclosures.

There are additional federal, state and municipal laws that require sellers to disclose the condition of the property prior to the purchase agreement. Homes built prior to 1978 require a lead based paint disclosure. The existence and condition of wells and private sewer or septic systems must be disclosed in Minnesota. Some septic systems will require additional inspections at a county or local level. Also it must be disclosed if the home has ever been used in the production of methamphetamine. It is important for a buyer to understand they have rights and to be very careful when waiving them away. It may not be the best decision to buy a foreclosed home without the assistance of an experienced professional REALTOR representing your interests. As tempting as it may be to buy that “picture perfect” home at the amazing price, it could end up costing thousands more without proper disclosures and inspections.

Copyright 2009 terieckholm.com

Attention First Time Home Buyers—Incredible Affordability and an $8000 Tax Credit Make 2009 the Year to Buy!

If you haven’t heard, the recently approved stimulus package had a wonderful provision for anyone buying their first home; An $8000 tax credit!
Here are the things to know about the $8000 Tax Credit in a nutshell:

• The tax credit is for homebuyers buying their first home only.
• The money does not have to be repaid.
• The credit is capped at 10 percent of the home’s purchase price with a maximum of $8,000.
• Homes must be purchased on or after January 1, 2009 and before December 1, 2009. (Note not the credit is NOT available until the end of the year. Plan accordingly!)
• Income caps to apply…Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• Additional questions on the $8000 can be answered by CLICKING HERE!

Now combine this with the Twin Cities highest affordability index for homes on record according to the Minneapolis Board of REALTORS® and first time buyers have an amazing opportunity! Get the skinny on the affordability index here.

So how does a first time buyer in Anoka County make the most of this opportunity?
Start researching now…not homes, check out professionals. Looking at homes may be fun and exciting but it is not the first step in buying a first home, finding a professional REALTOR® is!

Having a professional agent to guide you through the buying process doesn’t cost a penny!

As a professional Anoka County REALTOR®, I assist people in buying and selling homes in Blaine, Ham Lake, Forest Lake, Lino Lakes and Andover everyday! I can help spot that great deal quickly before it gets away. I can also point out homes on the market that may not be the best choice for a first time buyer. It all comes down to expertise!
One of my most important jobs is assisting the first time buyer to locate financing through a professional dedicated loan officer. My mortgage contacts work with my clients to help them find the best loan depending on their individual needs and situations. As a team, we work hard to be certain that our home buyers don’t write an offer on a home that they cannot afford. Buyers need to feel comfortable that they will be able to make the payment on their dream home…not just that first month but next year and the year after that.

Once preapproved the fun can really begin…Looking for a good solid foreclosure in Anoka County? Want a picture perfect home in Coon Rapids? Want a bit of land in Columbus or Lino Lakes? Looking for a detached townhome in Blaine? I help buyers define their dreams and pinpoint a handful of homes that meet your specific needs.

With the loan preapproval and home criteria is firmly established, the viewing of the houses can begin. With me as their professional agent at their side, my clients confidently view homes they can afford and would be proud to consider their home. After visiting a several…usually around 10-12, I assist first time buyers through the paperwork process as we write up the offer on their home.

Now that the offer is accepted, I assist the new buyers to find qualified professionals to inspect the home as outline in the purchase agreement and handle the process of closing the home in a timely manner. My first time buyers never feel abandoned or alone. We are a team until they get the keys to their dream home!



Copyright 2009 terieckholm.com

Would YOU Hire a Bikini-Clad REALTOR? How About in a Hospital Gown?

Valentine’s Day started out for me with a visit to St. John’s emergency room in Maplewood. No worries, I’m okay. I found out after a few hours of tests that I tend to faint when in extreme back pain but I digress…While waiting behind the curtain in a gown that opens in the back without much else on but socks, I heard one of the nurses discussing her search to purchase a first home with a colleague. Just a few feet away from me, I could clearly hear the discussion. “Looking for a home in Forest Lake or Hugo….Great homes on the market…This one is a foreclosure…I don’t really know what short sale means…”

Yep the REALTOR® radar kicked in but alas I’m not exactly dressed for success in the hospital issued garb. Besides I was still feeling a little woozy after the early morning fainting spell. My husband jokingly offered to go out and give her my card but I declined. It is hard to be viewed as a professional REALTOR® and discuss homes in your skivvies between a blood draw and EKG.
I guess I am just not THAT aggressive when pursuing a client.

I do know of an Anoka County real estate agent that is very aggressive. I heard tales of her amazing ability to drop everything that she was doing to run over and offer her services to every car that drove up to the home she had listed across the street. I heard the tales from a less-than-impressed family that had the unfortunate opportunity to be met by this real estate agent at their car. She was sunbathing when they stopped for a flyer. The aggressive agent didn’t bother with a towel but high-tailed it over, barefoot and bikini-clad, to ask if they wanted to see the inside of the home. They declined and drove away. FAST!

I know I am a very good REALTOR and buyer’s representative. I would have been able to expertly assist the young emergency room technician to purchase her first home. I know the market and have been taking buyers to see foreclosures and short sales all over Blaine, Forest Lake and White Bear Lake for the last several months. I may have even been in some of the homes that she had printouts for. But as a professional REALTOR®, I chose to remember there IS a time and place for everything. This wasn’t the right time.

I prefer to save my aggressiveness for the negotiations and find my leads when I am fully clothed!

Copyright 2009 terieckholm.com

Minnesota REALTOR®, Teri Eckholm Explains Short Sales

Ring—Ring! There’s another call…Since, interest rates dropped to an all time a few weeks ago, buyers are again asking questions and getting in a buying frame of mind. As a Minnesota REALTOR®, many of the calls I have received lately are from excited first time buyers and/or the parents of young people as they assist their children looking for their first home. A lot has changed since mom and dad bought a home so there can be many questions.

This time the call is from an excited first time buyer who has been scouring the internet for the perfect home at the ideal price. He calls and wants to set up some showings for the homes he has found. With a quick email, he forwards the dozen MLS listings and I bring up an array of his dream homes. With five of the six properties there is an agent note that indicates the home is in short sale. When I pass on the information, I hear a puzzled silence and pause.

Time for Real Estate 101—What exactly is a Short Sale and why should I care?

After months, going on years now, of the media coverage of the mortgage crisis, many people still do not understand what a short sale is…And more importantly, how it affects the home buying process. In a nutshell, a short sale is when the seller owes more on the home than it can be sold for in today’s market. To sell the home, the seller must ask the bank to approve the sale of the home for the lower price. It is also know as a pre-foreclosure home and can be a way for a homeowner to avoid being foreclosed upon if they can no longer pay their mortgage.

Why should a buyer care if a home is in short sale? A buyer will submit and offer with earnest money just as in any other real estate transaction. The sales price and terms are negotiated and agreed upon by the seller who then signs the purchase agreement, contingent upon the bank agreeing to the lower sales price. Some larger banks have hundreds, if not thousands, of these files waiting for approval. It is the norm to wait 8-12 weeks for an answer from the bank. Adding to the problem, many sellers will have more than mortgage on their home and therefore more than one bank can be involved in the approval process. An offer can give the first bank most of its money back so it will be willing to approve but the second bank, who is in a subordinate position, will get nothing and not approve the deal. It can be frustrating for a buyer to wait for an answer when there is no guarantee of when you will hear back from the bank.

How does a short sale compare to a foreclosure? In a foreclosure, the bank has taken back the home from the owner. The seller is now the bank and a buyer is dealing directly with the bank when an offer is written. A bank representative did not reside at the home so cannot disclose or tell you information about the condition of the home. While negotiations are easier and much faster, buyers must accept the risk and purchase the home in as-is condition. It is extremely important to have a home thoroughly inspected when buying a bank owned property.

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 or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Buying a Home? Check out my new HOME BUYER'S BLOG!

Copyright 2008 terieckholm.com

Foreclosures! Not Just for Investors Anymore…First Time Buyers also get DEALS!

This past spring I asked readers if they were ready to take on the challenge of buying a foreclosure or short sale home. Test Yourself--See If YOU are Ready to buy a Foreclosed Home! was a tongue-in-cheek look at the average homebuyer purchasing a pre-foreclosure or bank owned property. I have thought of that post often in the past few months …At the time, I was seeing overpriced pre-foreclosures and trashed REO houses, in many cases buyers were better negotiating with traditional sellers for their dream homes. But, as they say, that was then and this is now. NOW, I think it is time to take a serious look at foreclosure properties.

In the past few weeks, I had the opportunity to visit several dozen bank owned properties in the $100,000 to $150,000 price range throughout Anoka County. Though several were trashed, my buyers and I were pleasantly surprised to find many REO homes in move-in condition. The fear of AS-IS purchasing was still a concern, but not so dramatic as when the homes literally had holes where the appliances should have been.

Now, I am finding tremendous deals on bank-owned homes throughout the north and east metro on a daily basis. Many properties are going back to the bank in extremely good condition and being put back on the market quickly and at unbelievably affordable pricing.

So what do you need to know if considering purchasing a foreclosed home? Here are a few key points to consider….

Understand the difference between short sale and REO. A short sale or pre-foreclosure is a home where the seller is selling but owes more to the bank than the home is worth. A REO property has been returned to the bank and is now bank-owned.

In a short sale, the seller lists the home on the multiple listing service, MLS, for what they believe the home to be worth even if the list price is less than they owe. When an offer is received on the property, the bank is sent the offer for approval as they will have to write off thousands of dollars to attract a buyer. It can take months to receive an answer from a bank (or banks if there is a second or third mortgage on the home) and the answer is not always positive.

I recommend to most buyers that it is better to keep looking at other properties and wait and see if a particular short sale home goes back to the bank. If it becomes an REO property, it is usually relisted at a much lower price. Because the bank now knows exactly what it wants for the home and only one bank or division of a bank is involved, answers come much more quickly; usually within days, if not hours. This is a much smoother process.

Get Representation. Dealing directly with the bank is extremely risky. If you are going to be looking at foreclosures, find an agent you trust and sign a buyer’s representation contract. Then that REALTOR is working for you! When I represent a buyer, it costs nothing to that buyer because my commission is paid for by the seller. I can help a buyer understand if the list price by the bank is a fair price for the property and in its current condition.

When you find that perfect foreclosure, I, as your agent, assist you in putting together the best offer for the situation and negotiate on your behalf. Good homes are seeing multiple offers. If you find an almost perfect foreclosure, chances are several other buyers will like the home too. In November, I wrote offers on three move-in condition foreclosed homes. All three had multiple offers just days after the home listed. A listing agent is working for the bank. Don’t you think you deserve to have a professional REALTOR working directly for you?

Get Ready to Waive Goodbye to your Right to a Disclosure. Minnesota requires that the seller of a home disclose all known defects to the property. Most banks will require you to sign a seller’s alternative to the disclosure where you will waive your rights to receiving a homeowner’s disclosure. This is not negotiable as the bank representative did not live at the home and does not have any way of knowing the condition of the property.

Inspections are Critical. Buying a foreclosed home means buying a home in AS-IS condition. That means the bank will not warranty that anything in the home is working and will not make repairs to any part of the home. A complete home inspection is designed to give you a picture of the current condition of the property and if any major repairs will be required to make the home habitable.

Rethink a Home Warranty. Many buyers do not want to spend the additional dollars on a home warranty. However in the case of an as-is purchase from a bank or other corporate-owned property it could be a smart investment for that first year. If something is missed at the inspection or is not visible, a home warranty might be able to cover the defect. For example, central air conditioning cannot be tested during a Minnesota winter so come spring, you might find your home full of hot air and no blower to help you cool down. Most home warranties will cover central air conditioning.

Don’t Overlook Traditional Sellers. Homes being sold by a traditional home seller in this market are in most cases priced to sell! This is good news for FHA and VA buyers as many foreclosed homes will not qualify for these programs due to the poor condition of most properties. Sellers understand they are competing with banks that have only a financial not emotional interest in the property. So homeowners needing to sell have to check their emotions at the door and price their home accordingly. A lovingly maintained property with a full disclosure at a rock bottom price could still be the best deal for a buyer.

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 or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Buying a Home? Check out my new HOME BUYER'S BLOG!

Copyright 2008 terieckholm.com

The Thousand Dollar Gamble—Why Buyer’s Representation is Essential!

I love working with home buyers! First Time Buyers. Move up Buyers. Relocation Buyers. You name it—I love it!
That is why a few weeks ago when a young couple called for a showing on a home I have listed, I was excited. I pulled together my Home Buyer’s Packet with information and tips for anyone considering making a move and headed off to the home.

Now I know that most people do not fall in love with the first home they are shown. But, I am also aware that buyers scour the internet for weeks, even months prior to calling a Realtor. So after a few pre-qualifying questions, I knew this young couple was ready to buy their first home.

I arrived to the home first and turned on all the lights to brighten up the place. A few minutes later several cars pulled up. The young couple and both sets of parents got out to inspect the property. After looking everything over, I asked the young people the big question:While you are out looking at homes, are you looking for a Realtor at the same time?
Usually the answer is vague so I am ready with my speech about choosing a Realtor. This time one of the dad’s spoke up. “They don’t need an agent because the will get a better deal without one.”
OK. I just met the young couple and their parents so I had to tread lightly here. I wanted a further explanation of what this guy was thinking, so I asked. It was his belief that with both sides of the commission on the table a better deal could be negotiated.

Well maybe, but usually not. Yes, there can be variable commission rates with dual agency so the offer could be a bit more attractive to a seller. But that amount is negligible in the grand scheme of things when buying a first home.

The total commission paid by the seller on a $200,000 home will run anywhere from $8,000 to $14,000. Now unless the agent is the listing broker, a percentage of the commission will go to the brokerage; usually 25-50%. Now we are down to a total commission for the agent of $4,000 to $7,000. How much of that will the buyer see in a lower purchase price? Maybe $1,000 to $2,000. Is it worth a thousand bucks to gamble that a great agent is going to be the listing agent on YOUR dream home?
In the alternative, if a first time buyer signs a buyer’s representation agreement with a Realtor, the savings can be in the tens of thousands. When you work with a Realtor to show you properties, that agent will help you through the negotiations, prepare a market analysis for the neighborhood, and assess each property with you. When you walk into a home unrepresented, the listing agent is working for the seller until you sign and agree to dual agency. The agent owes the fiduciary duties only to the seller, including disclosure and confidentiality, so everything you say about your financing and interest in the home is disclosed to the seller as required by the listing contract.

Minnesota state law requires that I disclose that I am working for the seller when I first meet with buyers. When I explained the Minnesota agency disclosure document to this young couple, it was the first time they had seen or heard of it after viewing several homes with various agents. It was obvious to them that not all agents are following this law.

This is where I will leave the story of these first time buyers but I want anyone considering buying a home to remember this, buyer’s representation with a Realtor will save you money. Here are a few examples of how this savings can work:

New Construction—When buyers visits a model home, the sales agent in the house will quote the list price and discounted savings that the builder is offering. That's it...End of Story. But, if buyers sign with their own agent, often a better price can be negotiated with the builder. I had clients who saved an additional $15,000 last year on their dream home from the price quoted by a sales agent. Had my buyers walked into the model without me as their Realtor, they would have paid more for their home.

Existing Homes—As I walk through each potential home with buyers, I point out concerns to address in the purchase agreement. Will the upgraded fixtures stay with the home? Is that discoloration a moisture problem? The carpet, roof, furnace needs replacing, can it be done prior to closing?

As a buyer’s agent, I will discuss these issues with you on the home and assist you structuring an offer addressing the defects in the home and repairs that will be needed. I also assist my buyers in determining a fair initial offer on the home based on comparable homes that have been recently sold in the area. If the home is overpriced, we can often negotiate a lower sales price. If the roof needs replacing and we are able to negotiate a new roof, that can be $4000-6000 in savings alone.

Will the listing agent point out all concerns or that the home is overpriced? The answer is no, as they are working for the seller. Unless it is a material fact about the property, there is no duty to disclose to the unrepresented buyer.
Septic Systems and Wells—These are important and very expensive issues when considering purchasing an acreage property. Some Realtors who work mostly in the Twin Cities will not know how to address these home features. If after agreeing on a price for the home, the septic or well does not pass an inspection, who pays the thousands of dollars for the repair or replacement?


If you are looking at an acreage property, having a Realtor that understands how the testing process works and how to write a purchase agreement to address these important issues is essential. The cost of replacing a failing septic system can be well over $10,000, not including replacing landscaping for the new drain field. Wells can have a similar price tag if complete replacement is required.

Service Professionals—Whether you need a loan officer, title company or inspector, many Realtors have a list of service professionals at their fingertips to get the job done efficiently and at the lowest possible cost to you. Most buyers do not have first hand knowledge to make a great selection for these professionals. When making the single largest purchase in your lifetime do you really want to take your chances asking DEX? I work in this industry everyday and know when it is worth it to pay a few dollars more and when the savings is not worth the cost.

The bottom line when buying a home is, you need a knowledgeable advisor in your corner. Partner with a Realtor you trust before you find that dream home. Not only can it save you thousands, it can save you headaches as well.


More Articles on Buying Real Estate that might be of interest:

• Are You a BUBBA?


• Real Estate Agent Selection Primer—How to Choose the BEST Realtor for YOU! (Part One of Two)


• Real Estate Agent Selection Primer—How to Choose the BEST Realtor for YOU! (Part Two of Two)


• Rent VS Buy? It's Time to Revisit the Question!


• How to Choose a Realtor—Why a Good Friend is Not Always a Good Option


• How to Choo-Choose a Realtor and Avoid a Train Wreck!

Featured Listings:
3608 Woodland Drive, Ham Lake
20685 Georgia Ave N, Forest Lake

Ready to buy in the Twin Cities without taking a gamble? If you are considering 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 2007 www.terieckholm.com

How to Choose a Realtor—Why a Good Friend is Not Always a Good Option

Yesterday, I was on the phone with a client. This family was referred to me by past clients that I had met at an open house. I have worked the family for several years now and while I now consider them friends, I was their Realtor first.
While chatting about other things, my client mentioned her son and his wife had just signed an agreement on their first home. I didn’t have a second to feel disappointed as she immediately said that they had really encouraged him to work with me. But they chose to work with the wife’s father’s good friend instead. Dad’s friend was a long time family friend from church and they just couldn’t say no. She also added that they now questioned the wisdom of their decision.
My clients accompanied the young couple on a final visit to the two homes they were considering. Now I have taken my clients to several properties throughout Anoka and Chisago counties looking for a hobby farm that they will be proud to call their home. When we look at a house, I know that they are thinking about which kid gets which room and if the land is suitable for horses. I consider it an important part of my job to be the look out for the houses’ potential problems that they can discuss with an inspector about like the roof, foundation, window sills and ceilings for indications of water damage, signs of pest infestation etc. Though I am not an inspector, there are things real estate agents should be aware of and look out for to avoid problems for their clients.

My client said she could not believe her son’s agent. He just stood back, said nothing and let the young couple walk with their parents and grandparents around the house. Even when inquiries were made, he offered no assistance. She went on to say that of the two homes: one all ready done and move-in ready and one requiring an abundance of work, the couple chose the latter. And this low-key agent advised his clients to offer Full Price as the only way to get the home.

What? Did I hear that right? Full-price in a buyer’s market? This is where the mom had to offer advice to her son on his first home purchase. Advice he was not getting from his agent. No one offers full price in this market. The son and daughter-in-law did offer less and their agreement was accepted. Through the purchase agreement process they realized maybe this agent wasn’t their best choice. Maybe he was new and didn’t know the paperwork. Maybe he was one of the many agents who work one or two deals a year and isn’t aware of how negotiations change in a buyers market. Maybe he just isn’t experienced enough to provide adequate advice. Maybe he doesn’t like the negotiation process.

I did a little research and this particular agent was not in a dual agency. Had he been a dual agent, he could not advise on terms, such as price, as being under contract with both clients, an agent cannot do anything to harm either. But I also discovered this family friend works on the other side of town from where this young couple wanted to live. It is hard to show homes and advise on an area when the agent is unfamiliar with it.
With over 30,000 licensed agents in the state of Minnesota, everyone knows a real estate agent. Some of these people have had their licenses for years but only dust them off once a year to “help” out a friend. Others are good people who have left other professions but were too young to retire and decided to give real estate a go. Many agents look to supplement the income from their full time job with a sale here and there. If you are considering hiring a good friend who fits into one of these categories, think long and hard before you do.

A home is the biggest and most important investment most people will make in their lifetime. You owe it to yourself to have the BEST representation in this transaction. Take the time to interview several people before signing a buyers’ representation agreement, not just your trusted friend. If the home buying process does not go well, it could not only cost you money, it could cost you a friendship.

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 terieckholm.com

Home Buying 101: How Much Earnest Money Do I Need?

Every home buyer loves the process of visiting homes and finding that perfect place to call home. Sitting down and writing the offer is not always as much fun! For many people, the process of buying a home is something they go through only once or twice in a lifetime. New terms and questions come are the norm as the purchase agreement is prepared. As a Realtor in the northeast Twin Cities metro, whether I am working with first time buyers, move-up buyers or empty-nesters, one question always stops the process for a moment of discussion. How much earnest money are you prepared to offer?

The amount of the earnest money varies with each purchase agreement. A buyer must first understand the purpose of the earnest money to determine the right amount to include with the offer.

Earnest money is the funds that a buyer puts down to demonstrate to the seller their seriousness about buying a home. It should be an amount sufficient enough to indicate to the seller that the buyer will not walk away from the deal without good reason. In Minnesota this is traditionally 1% of the purchase price but it can be up more. A lower amount can also be acceptable with some offers. However it is important to be realistic.

A few years back, a potential buyer wanted to put down $100 earnest money on a $300,000 home I had listed. The seller was not impressed and felt it was an unreasonable amount as the buyer could easily walk away from the deal with only $100 at risk.

Generally the earnest money funds are in the form of a check. That money is deposited into the listing broker’s trust fund or escrow account. In Minnesota, the funds must be deposited within 3 days of an offer having been accepted in writing. Yes, this does mean that the check will be cashed in 3 days or less!
If the offer is accepted, the earnest money will be applied to the down payment and/or the closing fees when the closing takes place. If your offer is not accepted the check is not cashed and the money will come back to you.


However, if the offer is accepted and the check cashed and then for some reason all contingencies are not met or other situation arises where the sale does not proceed, the buyer does not automatically receive a refund of the earnest money. Nor, does the seller automatically keep the down payment. Buyer and seller must reach an agreement for the cancellation of the agreement and disbursement of the funds.


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. Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.


Copyright 2007 terieckholm.com