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

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

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

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


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


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


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


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

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

Mortgage Fraud—Important Reminders For Buyers, Sellers and Agents

Last summer while driving home from an appointment, I received a call on my cell from an agent who had just shown one of my listings. The listing was a little town home in the north metro of the Twin Cities. Since there were several other properties listed in the development, my seller had just reduced the price by nearly 10% to generate activity. This particular buyer’s agent was very excited. Her client loved the property and they were going to sit down that afternoon to write an offer. Before the did, the agent had a question: “Since buyer had some financing issues, could the seller do a contract for the down payment?”

My seller was not in a position to do that and I said so. She then asked if the property would appraise for $10,000 over the amount. If it could, then we could write the offer for $10,000 more than the asking price if the seller could agree to write up a contract for deed that would be immediately forgiven at the closing. As I maneuvered down the road to a stoplight, I paused a second. After taking a breath I asked the other agent, “Do you realize that what you just suggested is Fraud?!”

The buyer’s agent said that the loan officer had suggested this method and it was perfectly legal. The agent didn’t sound very experienced so I suggested that she check with her broker regarding the situation and call back. When the phone rang again, a few minutes later, there was a nervous, distraught agent on the other end of the line. She would not be writing an offer after all. She was distraught because she was a brand new agent and had just closed on a similar deal a month ago. She was at risk of losing her license.

This is not an isolated case. Mortgage fraud is not common but it is out there.

According to the FBI webpage on mortgage fraud, there are two specific types: Fraud for Property and Fraud for Profit

The scenario outlined above was Fraud for Property or Fraud for Housing. This is where a specific borrower misrepresents information on the loan application, appraisal, property or other document for the purchase of a specific property. Often buyer’s really want to be home owners but are not able to qualify through the correct channels. This type of fraud accounts for an estimated 20% of all mortgage fraud.

Fraud for Profit is more newsworthy. It is when industry professionals, real estate, title and mortgage agents, generate multiple loans for multiple properties. There are many different scenarios where unsuspecting individuals have signed documents and given social security numbers for a variety of reasons. Then realize months down the road that their information was used to fraudulently purchase properties.

To learn more about the different types of mortgage fraud schemes visit the FBI mortgage fraud webpage .

So how do you protect yourself?

Know your Realtor—Check out all credentials with local board of Realtors. Check with the state and local licensing board. Ask and check references.

Know your Loan Officer—Just as with your real estate agent. Check credentials, licensing and references. Deal directly with the loan officer and don’t arrange loans through third party services.
Don’t Sign ANY Blank Documents—Or any documents with omitted, incorrect or blank information Make certain you understand everything you sign. If you are unsure of any document, check with your attorney or legal representative before you put your name on the bottom of the page.

Do not agree to refund any money to the Buyer after closing—This is a common mistake. Often at the final walk through, a buyer will notice something they would like repaired, but the closing is in an hour. In order to facilitate the closing, the seller will agree to an amount to pay the buyer to have the repair made. If the mortgage company is not informed, it could be considered fraud. How should the situation be handled? The seller could agree to pay the service person directly. If a repair needs to be made, make it. If something needs replacing, replace it. If the funds can be escrowed for the repair, escrow the funds. All documents and agreements must be approved by the lender.

Get Copies of Everything you Sign—Protect yourself. Make certain when you leave the office you are given a complete set of documents including everything you have signed.

Copyright 2007—Teri Eckholm

Homes! Not just a place to live…A Smart Investment

When my husband and I bought our first home, we didn’t really have our financial future in mind. We were going to be getting married and needed a place to live. After 4 years of college and sharing dorm rooms and rental houses with friends, we knew that a lease wouldn’t work for us. Without any financial planner’s advice, we instinctively made one of the best financial decisions of our lives…One that would affect our bottom line net worth for years to come.

Recently, I got together with four single women friends from high school. It was interesting to see how their financial paths differed over the past 20 years. All four started out with similar degrees from four year colleges. The four started with similar salaries but in different industries. The two gals who purchased their homes were doing much better economically than the two who continue to live in apartments. As a Realtor, this intrigued me and I decided to look into it a bit further.

Homes are Smart a Investment for Anyone

According to the Federal Reserve Board, VIP forum, your net worth is directly tied to whether you own or rent a home. The statistics are astounding:





According to consumeraffairs.com, the national wage for the average American worker is $40.409. If an average American owns his/her home, chances are that his/her net worth will be 12 times higher than your renting coworker. Even at a low income, you can have significant net worth, if you own your home.
Stop Increasing Your Landlord’s Net Worth
With every rent check you send in, your landlord gets a little richer. And you don’t. It is that simple.

Many young single people are waiting for the “right” time to buy a home. Single women don’t want to buy a home and “put down roots” until they are in a permanent relationship. Single men don’t want feel tied to a house or community. This is old-fashioned thinking. The mortgages products offered today allow almost anyone with a stable income to purchase a home. Whether you are married or single, man or woman, the earlier you become a homeowner, the more financially stable you will be.
So what does this mean to the average American? Don’t wait!
Are you a college student? Consider buying a home near campus and rent out rooms to other students. Your renters will often pay your mortgage!

Single with limited funds? Start small and consider roommates. Remember as a homeowner, you will be responsible for maintenance and repairs so figure all costs into your budget when making your decision.

Think you may relocate soon? If you won’t be staying in the area for three years, it may be best to rent. If you currently live where the rental market is active, you may want to purchase and keep as an investment if you have to move.
Be Smart! Treat Homeownership Like an InvestmentMaintenance is essential for your home to accrue in value. Periodic updating and basic home care is required. You have to keep the gutters clean and the roof in good repair. The heating system needs to be serviced and the exterior painted or stained to avoid weather damage. A good home repair book will give the first time homebuyer a guide to the routine maintenance required for your home.

Of course to continue to accrue net worth, this does mean that you need to keep the equity “IN” the home. Avoid enticing offers to refinance with 0% down so that you can take a vacation or buy a new car. Using an equity loan can be beneficial to you if you are using for home upgrades, remodels or to purchase a second home for recreation or investment.

Want to learn more?

Contact me! As a Realtor I can help you through the buying process and set you on the path to homeownership. In Minnesota, the buyer doesn’t pay an additional fee to use a Realtor. Sellers traditionally pay the Realtor fees. And the advice from an experienced real estate agent is invaluable to find the home that best meets your needs and situation.

Copyright 2007 Teri Eckholm

Why Some House Flips are Flops

How did it happen? You spent months researching how to invest in real estate. You went to seminars, read books and magazine articles showing the easy way to buy properties to fix up and sell for profit. You may have worked with a great Realtor to find the perfect property or came across a FSBO that was a tremendous deal. After the closing you worked hard to rehab the home to sell quickly: fixed the plumbing, put in new cabinets or carpeting and repainted with neutral colors. Now the home is on the market and it is NOT selling. What went wrong?

Although I am aware that each situation is different, I would like to share a story of first time real estate investors gone wrong. If any part of the story starts to sound familiar, you might want to revise your real estate investment plan.

Two years ago, I was contacted by a couple for a market analysis on a property they were preparing for sale. I met with the owner at the vacant home. She was extremely excited because the home they had bought as an investment was almost ready to list. It had new flooring, paint, carpeting, cabinets and countertops in the kitchen and bath. I casually asked, “what made you take on this endeavor?’ The answer was quick and direct. “We are going to make a ton of money!”

I prepared the market analysis and came up with a market value of $299,000-309,900. About two months later the home was listed for sale by owner for $349,900 or 12-15% higher than I recommended. I decided to keep an eye on this house to see how the first time investor would fare.

The home was re-listed in August with a Realtor. However on closer inspection, the Realtor was the Mrs. Seller who just got her license. Sometime in October they decided to reduce the price to $299,900 but the summer selling season was over. Minnesota had entered a real slowdown in the market and the listing was cancelled in November.

I noticed the home again hit the market last fall. It was listed by a different Realtor but the tax records indicated that the owner was the same. The price was now $269,900 and the home in need of TLC and repairs. This time the home sold in a couple of weeks as it was a great deal.

So what happened? Based on my experience and what was going on in the market, I think these new investors attempted to be landlords when the home didn’t sell for the price they wanted. Renters can be very rough on homes and after rehabbing once, they didn’t have the heart to try again.

In my estimation, this couple may have just broken even but more than likely lost money. They had originally paid $240,000 for the home. They probably had invested a minimum of $7,000 in materials on the repairs that were originally outlined when I viewed the home for the market analysis. The home actually sold for $267,500 with the seller contributing $7,500 for closing costs. Add in a modest 5% commission of $13,000 (though it was more likely 6 or 7%), they may have broke even.

This is not an isolated case. I am tracking another home with another first time investor that I believe is headed down a similar path. It is not as easy to be a real estate investor as the infomercials would have you believe.

There is money to be made investing in real estate especially in the changing market with the high rate of foreclosures. But keep your expectations realistic. Work with (and listen to) an experienced Realtor when selecting a property to invest in. Do a cost analysis including all repair costs and compare to an estimate of what the refurbished home will sell when complete. Keep in mind that the market is always changing and plan accordingly. Have your Realtor do an updated market analysis prior to listing the home. If the market has changed, make certain that you price your home accordingly. Treat your investment like a business and stop dreaming of a “ton of money”. If you don’t adapt to the changing market and you price the home too high, it won’t sell.

Real Estate investing can be very profitable but it is not for everyone. If you are not prepared to work with professionals, listen to their advice, keep abreast of the market and change with the times, it may be best if you invest elsewhere.

Copyright 2007 Teri Eckholm