Why you really NEED a REALTOR to Buy a First Home!

Buying a first home is a very exciting time in a person's life. Whether you are coming from an apartment or a basement bedroom in your parent's house. the idea of venturing into owning real estate for the first time is quite an undertaking. With all the online shopping tool and real estate sites, a homebuyer can virtually tour many homes and even be pre-approved for a mortgage without setting foot outside your current residence. Many home buyers might question why a REALTOR® would even be required at all. Of course this course of action could work for you until want to see a home in person or write up an offer. But, did you realize that calling the listing agent of the property can put you at a HUGE negotiating disadvantage? It all comes down to understanding the concept of agency. 

In Minnesota, real estate brokers and agents are required to disclose the type of working relationship they have with parties in a real estate transaction.  Homebuyers have different types of relationships available to them.  It is important to understand these before you call a real estate agent to see a home or sign a  purchase agreement for a home.  These relationships are called  “agency” relationships and carry with them legal, fiduciary duties and responsibilities for the broker/agent as well as for buyers and sellers. 

The 3 most common agency agreements are the buyer's agent, seller's agent and dual agent. 

Buyer’s Agent 

A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer including the utmost good faith, loyalty, and fidelity.  The agent will negotiate on behalf of, and act as an advocate for, the buyer.  The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency.  The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property.  A separate written buyers’ agreement or contract is required which sets forth the duties and obligations of the parties.

Seller’s Agent

A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller which includes the utmost good faith, loyalty, and fidelity.  The agent will negotiate on behalf of, and act as an advocate for; the seller.  The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency.  The agent must disclose to buyers all adverse material facts about the property that are known by the broker.  A separate written listing agreement or contract is required which sets forth the duties and obligations of the parties.

In both buyer and seller agency, the following fiduciary duties are owed to the client: 

FIDUCIARY DUTIES

Loyalty

Obedience

Disclosure

Confidentiality

Reasonable Care

Accounting

DUAL Agent 

A dual agency is created when both the buyer and seller have signed representation agreements with the same broker. The parties may have two different salespersons or they may be the same person. All duties and obligations to the buyers and sellers remain the same in a dual agency.

Because it is impossible to disclose all information AND be confidential at the same time, dual agency must be disclosed and agreed to in writing.  All material facts regarding the property must be disclosed regardless of agency. 

Why is Agency Important to a Homebuyer? 

When you look for a home, every house listed on the Multiple Listing Service (MLS) has an agreement between the seller and listing broker all ready in place. If a buyer does not sign a contract and attends an open house or calls the listing agent, the nice REALTOR(R) asking all the questions about your financial ability WILL share everything you say with their seller. They are contractually obligated to do so. 

But when a buyer signs a contract with their own REALTOR® before viewing any homes, their private information stays private. 

AND the best part for MY buyers is that signing a contract does not cost ANYTHING! All fees are paid at the closing and the commission is paid for from the seller so there is NO OUT of POCKET cost to have a REALTOR® in your corner.  

Still have Homebuying Questions? Email, Call or Text me...I can help!   If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District. Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2015 www.terieckholm.com

The News is IN! Homebuyers Wanting a Good Deal Need to Move Now!

Just two weeks into 2013 and you’re thinking this is the year to make that move. The Minneapolis St Paul real estate market is on the move again so it you are planning to get that “bargain of the century”. Well, maybe you should have bought last year. Check out the recent Pioneer Press article, which outlines the Twin Cities year to year sales statistics. Prices are on the rise. But there are still deals out there for buyers, even if you do not want a foreclosure or short sale.

Chart from 1/11/13 Pioneer Press article by John Welbes

Traditional sellers are getting houses on the market early this year. What is a traditional seller? Those are the people who own a house and have enough equity to sell it without having a bank involved. Many traditional sellers have been hiding in the woodwork so to speak for the past few years when prices were so unbelievably low. Now that they are on the rise again, they are ready. Homeowners have spent the past few years updating and repairing their properties so they would shine in a changed market. When a traditional seller gets a showing, the home is a joy to enter with a shoveled walk, warm temperature in the home and sometimes a cookie on the counter. When a traditional seller gets an offer, they respond quickly. It’s a joy to work with a traditional seller when buying a home.

So what should a potential home buyer do if they want to make a move in 2013?

• Get PREAPPROVED. Those updated cozy homes offered by traditional sellers are getting multiple offers. Sellers want to know that you can buy the home when they receive the offer. Having a preapproval from a professional, educated loan officer means you will not miss the change to put in an offer on your dream home. Even if you tried to get approved before but were denied, it could be worth talking to a loan officer again. Mortgage preapprovals are up 11% …And the best news, rates are still at all time lows! (If you are not sure where to get pre-approved, call or email me as I have some great contacts!)
• Work with a REALTOR® It is not the time to run around willy-nilly calling every agent that has a home listed to see the property thinking you could save money. While you are trying to connect with the agent of the perfect home that just listed, another REALTOR® could be showing the home to a preapproved buyer who could write an offer that day. Having your own agent, doesn’t cost anything in most cases but can get you into any home on the MLS that you want to see. Plus you can build up a rapport so when it comes time to write your offer, you know your agent is on your side.

What should a potential home seller do if they take advantage of this 2013 momentum?

• LIST NOW! Don’t wait until spring. You will get the best price for your home the earlier you list it. There is less competition now but there are many, many homebuyers in the market. Take advantage of this opportunity!

 

Copyright 2013 www.terieckholm.com

Going it Alone is a Thousand Dollar Plus Gamble

Working with home buyers is fun and rewarding. It can be the best part of my job as a REALTOR®  Whether they are First Time Buyers. Move up Buyers. Relocation Buyers--You name it—I love them!
That is why when a young, pre-approved couple called for a showing on a home I have listed awhile back, I was excited. I pulled together my Home Buyer’s Packet with information and tips for people in the process of buying a home and headed out.

I've been doing this for some time now and realize that most people do not fall in love with the first home they are shown. But, home buyers today are better informed. They scour the internet for weeks, even months before calling or emailing 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, both sets of parents and a few assorted siblings 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 real estate agent. But before I can start my spiel one of the dad’s spoke up. “They don’t need an agent. They will get a better deal without one.”
OK. I just met the young couple and their parents so I knew it was in my best interest to tread lightly here. I wanted a further explanation of this guy's reasoning, so I asked. It was his belief that with both sides of the commission on the table a better deal could be negotiated.

Interesting theory...I've heard it before, but that's almost never what really happens. Yes, there can be variable commission rates with dual agency so the offer could be a bit more attractive to a seller so maybe some of that could get passed to the buyer. 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 with a very small independent firm and also 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 home 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 unless you sign a contract 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 particular young couple, it was the first time they had seen or heard of it after viewing several homes with a variety of 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 and/or furnace needs replacing, can it be done prior to closing?

As a buyer’s agent, I discuss these issues with my buyers on each home and assist in structuring an offer addressing the defects and repairs that might 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 might be able to 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 short 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. A REALTOR® who work mostly in the Minneapolis/St Paul metro might 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 is essential. The cost of replacing a failing septic system can be cost $10,000-20,000, 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, a REALTOR® will usually 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 finding someone on Google? 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 adviser 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.

 

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

I Can Hold My OWN Hand!

Several years ago, 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 almost three-year-old son when he announced to my husband and I, “I can hold my own hand!” And being obstinate and two, he did.

He put one chubby little fist inside the other behind his back and attempted to step off the curb and into traffic. Realizing his need for independence, we explained the dangers of his actions to him. (Hey Buddy...Drivers have no way of seeing a tiny person below their windows as they back up their cars.) We compromised. He was allowed to hold his own hand everywhere 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 the stroller for his own safety.

That precocious son will be heading off to college in a few weeks and the mom in me is again struggling as he “holds his own hand” and steps of the curb into his future. He doesn’t need mom or dad to help with many things anymore. He is well prepared for the real world or at least this next part of it.

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 with the knowledge that when they will need to “step off the curb” I will be right by their side there ready to explain and guide them through every step of the process. Whether it is a question from a home seller at the time of listing the house about whether they should start looking for another home now or wait for an offer 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.

Are you ready to step off the curb and need a good REALTOR® by your side?

If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet , Homebuyers Success Packet or sign up for Listingbook Twin Cities Home Search. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2010 Teri Eckholm 

What I HATE About Car Shopping—Is What Some People HATE About Buying a Home

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We need a new car and have needed it for several months now. We have the ability to purchase one but have avoided the car lots like the plague. Why? Because car salesmen lurk there!

We have browsed on the internet for as long as possible but it was getting to the point of a test drive to make our decision. Last Saturday, my husband and I took a deep breath and decided to head to the Hwy 61 White Bear/Maplewood car mile of car dealerships to really get started.

We started off slowly…First we drove through a few lots without leaving the car. Then we had lunch. Finally, we could avoid it no longer and we got out of the car.

Our first stop was one that we had made before. It was a dealership where we had purchased a used car a decade ago and in a moment of great courage had stopped by last year…Did I say we really need a new car? No haggle pricing is their motto. Translation: No negotiation. (But who pays full price it this market, right?)

As luck would have it, we were approached by the same salesman we talked to a few months ago. At that time their brand was being discontinued but this guy told us it was definitely going to be picked it up—we didn’t believe him and we were right. We asked a few questions about a car on the lot but they no longer had the exact model car we wanted. This vehicle was larger and more expensive. We asked about the no haggle policy and were told that was still firmly in place….then he hedged and said he had never seen anyone get more than a $500 discount. (I guess they aren’t set in stone after all are they?)

Next, we headed over to a import/domestic dealer that had some awesome pricing on brand new 2009 models. With 2011 models coming in and 2009’s on the lot we figured it was worth looking a different brand than we had in the past. Here’s where things went from “finding someone to help us BUY a car” to “Someone SELLING a car to us”.

Let me tell you…I hate being SOLD anything!

We parked in the back and perused the lot first. According to their website, there were five 2009’s left and we only could find one on the lot. There were dozens of similar models in 2010 but none had all wheel drive or the options that we were interested in.

When we came around the building Mr. Eager Beaver jumping into action…He stuck out his hand to my husband and introduced himself.

“Hi Eager here. What can I do for you?”

We introduced ourselves and told him which car we were looking at.

“There isn’t a better deal out there for $17,995. We have one in White and one in Black? Which one did you want to see?”

We had looked over the white one but could not find the black one. He said with a smile that they hide the best deals but he would locate it for us. Then he started to talk about the price in the newspaper ad being a low price with a military discount and loyalty discount.

“But I saw you drive up in a GM car right? So not to worry, you get that discount…Not, military? I have to add $500 to the price.”

Wait a second…The priced on the car windows and the prices on the internet are not the prices without discounts? We are going to ADD to the prices? So far it was $1500 higher than advertised. Hmmm…That doesn’t seem fair.

“Well everyone is doing it so we have to in order to stay competitive.”

Seems wrong I said as we walked up to the black car we were looking for…this after looking in several cars for the right one. As we found it, we saw another salesperson and customer leaving on a test drive in the same model and year white car.

“Well there goes the white one now…You’re not too late though. Write a check for a $1000 and it can be yours until we get the details worked out. Just tell me which you prefer, white or black and I will get you the car! "

Excuse me…we aren’t going to write a check for anything until we finish asking our questions, researching and test driving.

In a condescending voice as if placating a small child, he says,

“Go ahead. What do you want to know? But you won’t find a better deal than on the two you were looking at. I’m just trying to help you.”

Okay…We want to understand why all the tags in the windows of the four red cars are at different prices.

“You are wrong,” said Eager. “They are all the same price…give or take. Depending on options.”

I tried to be clearer. I told him we were trying to figure out what the different options are and how they affect the price so we can decide which options and car will work best for us.

“Okay but, trust me, they are all the same.” Eager says. “We will have to look at each car.”

One by one he looks at the window sticker and drags us father down the row of 2010’s. Two of the cars did have almost identical options and prices somewhere in the $18900 range. We get to the third car and he says,

“See they are all the same car and same price. But we have another full back lot of cars if you want to look at a few dozen more,” Eager chuckles.

By this time, my husband is reading the window stickers and I am looking at the handwritten prices on the mirrors. The third red car has a big price tag of $19500. Eager’s last little joke was the last straw. Annoyed I say, “Let me understand this. They are all the same $17,995 as in the paper, if we add in $1500 for the non-discounts to the prices. But the signs say $18,900, $19,500 and…” now I am at the fourth red car. “$20,100? We don’t have to look at anything else. We are done here!”

My husband saw a bewildered Eager literally throw his hands to the heavens as I walked straight to our car. I was upset but my husband was laughing as we left. Probably due to the fact that he had the funny picture of Eager pulling his hair out while I was frustrated with the lack of information and assistance we received.

We did make it to a third lot but said. “Just looking” whenever approached by sales people.

So what does my rambling have to do with real estate sales?

One thing…I don’t sell houses. I let the houses sell themselves!

I don’t push people into buying something without allowing them to get all the information on the property they require to make their decision. I don’t lie about prices, discounts or the property itself. I present the information on the house and help people understand the paperwork. I inform them on what questions to ask as a buyer and why it is important to disclose everything about the property as a seller. I assist in negotiating a price that makes it a win/win for all parties involved.

Letting a house sell itself works for both buyers and sellers. Home buyers do not want to be rushed into a home purchase. They need to process and understand what they are buying or buyer’s remorse could set in and they will quickly back out of the deal. A seller needs their home to be properly marketed without over-selling it. A house that is oversold and pushed on a buyer without adequate information could leave a seller open to problems and possible lawsuits.

Mr. Eager Beaver might have had a sale Saturday if he would have just calmed down, provided us with the information we were requesting and gave us a few moments to process what we were hearing and seeing. Instead, he tried to hard to sell a car. He was so busy selling, he lost a sale.

In the market for a REALTOR® that knows how to market a property and let homes sell themselves? I would like to help. If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet , Homebuyers Success Packet or sign up for Listingbook Twin Cities Home Search. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2010 Teri Eckholm

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

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

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

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


• A good loan officer?


• An expert housing inspector?


• A title and closing expert?


• Septic and well inspector?


• Are you a skilled negotiator?


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

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

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

Copyright 2010 Teri Eckholm