South of the River News

April 26, 2009

How does a Counter Offer work?

Filed under: Real Estate Terms — Tags: , , , — Nichole Fredrickson @ 10:15 am

A counter offer is what happens when the terms presented in a purchase agreement of a home are not acceptable to a party involved. Home buyers or home sellers can initiate a counter offer in the negotiation stages of a home sale. Since it is traditionally the buyers that write an offer to purchase to be presented to the sellers, the sellers are usually the first to make a counter offer back to the buyers. When a seller receives a purchase agreement or offer to purchase their home, the seller has 3 choices. The sellers can reject the offer to purchase, accept the offer as is, or counter offer. The counter offer changes or adjusts certain terms of the purchase agreement offer. It can include the sales price, the closing date, the amount of earnest money, the personal property that the buyers want included in the sale, or any other points within the purchase agreement offer.

When the buyer receives a counter offer from the sellers, they then have the same 3 choices. The buyers can accept the counter offer with the new terms of the purchase agreement, reject it and terminate any further negotiations, or counter offer back to the sellers.

The counter offer is a tool used to further negotiations in the hopes of the two sides coming to an agreement acceptible to both parties. Counter offers should be in writing and accompany the final purchase agreement throughout the sales process. Counter offers are a very common part of the process and more transactions than not have counter offers that have been negotiated to come to the final sales agreement.

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January 14, 2009

Elko New Market Homes For Sale

Filed under: Local Events, Real Estate Terms — Tags: , — Nichole Fredrickson @ 8:54 am

route-mapJust to give you a pulse on the Elko New Market area and the real estate available, here are some interesting facts:

There are currently 61 active listings. Lets break that down, into 12 townhomes, 44 single family homes,and 5 hobby farms. New construction makes up 12 of those listed homes.

Of those 61 active listings in Elko New Market, 12 of them are specified as lender owned, or foreclosed. Another 8 of them are specified as short sales. That leaves 41 that are being sold by the owner without pressure of having to bring additional money to closing to cover the difference between the sales price and the amount owed on the mortgage. Pretty good statistics if you compare those to a number of other areas in the south metro.

Elko New Market summaries show there is a home for everyone here. They are priced between $49,900 and $508,900 with an average list price of $290,217. Square footage ranges between 1,150 to 4,768, averaging a total square footage of 2,465. The average Elko New Market price per square foot is $122. Other facts include an average ‘days on market’ of 112 and the average year built of listed homes is 1999.

This information is as of January 13, 2008.

With an average commute time for Elko New Market residents of less than 20 minutes, Elko New Market is the perfect place to call home. Affordable homes, with a wide variety to choose from, proximity to larger metropolitan areas and the small town feel of Elko New Market show its versitility and appeal. If you are thinking about a move to the southern metro area, check out Elko New Market!

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January 12, 2009

Who Needs Title Insurance

Filed under: Real Estate Terms — Tags: , , — Nichole Fredrickson @ 10:25 am

First of all, insurance is a crazy monster on its own…. so much to understand, so many options. When it comes to title insurance, here are a few key things to know. I must disclose, that as a Realtor, title insurance is NOT my strong-point, but the basics are here. For more information or for actual quotes on title insurance for your new home, please visit www.TrademarkTitleServices.com.

Title insurance basically insures your interest in ownership of the property. Its coverage would kick in if you had fraudulent liens placed against your property, or in the case of title mistakes that could have been made during your purchase. It also protects you against mistakes made in earlier sales of the home. It covers things as simple as correction of a name spelling or as messy as inaccurate property boundary lines.

Paying for title insurance isn’t an annual fee, it is a one-time fee that is based on the the purchase price of the property. It is usually paid for at closing.

There are two types of title insurance. First there are lender’s policies. These cover the your mortgage company and whoever holds the mortgage on your home. Most of the time, the lender will REQUIRE purchase of a lender’s policy. It is often common for the lender to include the cost of that title insurance somewhere in the closing costs that you pay to your lender. There are also owner’s policies. More times than not, this comes in handy when there are property line disputes, or when old liens and incorrect information has been recorded against the home. Your owner’s policy is a minimal expense, especially if you ever need to use it! The owner’s policy that you purchase is usually less expensive than 2 hours of attorneys fees, and that is generous considering I have never seen a claim be resolved in less than 2 billing hours. :-)

Lastly, ask your title company if a discount on the title insurance premium is available. Often, if the home has been bought or sold just a few years after the most recent sale, there is less work required to secure a title insurance policy. Sometimes when you sell the property, you may even get a portion of that title insurance premium you paid, back at closing.

Like I mentioned earlier, we are barely scratching the surface of the title insurance web. More information is available at www.TrademarkTitleServices.com.

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January 11, 2009

Homeowners Insurance Basics

Filed under: Home Tips, Real Estate Terms — Tags: , — Nichole Fredrickson @ 10:24 pm

Homeowners insurance can sometimes be overwhelming, but when you are buying a new home, take advantage of the time and ask questions to better understand your coverage. Below are just a few tips on understanding your insurance.

Coverage Exclusions: Be sure to ask and watch for any exclusions in your homeowners insurance coverage. Most policies will not cover earthquakes or floods. In Minnesota, earthquakes are not something we often think about, and until lately, floods weren’t that commonly thought about either. Flood insurance is usually available as an add on, but the point is to make sure you know what if any exclusions are in your policy.

Claim Limitations: Many policies are covered for a risk such as a home burglary, but watch for limits on those risks. Most times, there are limits on personal property such as electronics, art and jewelry. If you have items of great value, look into a separate policy for those items.

Replacement Cost: If something were to destroy your home, and you need to rebuild or ‘replace’ it, you need to know how much it will cost to do so. Make sure your insurace is sufficient enough to cover all of those replacement costs. If your home is insured for $200,000 and was destroyed by a tornado, you will only receive $200,000. If you meet with a home builder and they say it will cost $235,000 to rebuild the exact some structure, you are underinsured.

Cash Value: Let’s say your home was destroyed. Let’s say you decided not to rebuild, but to take your insurance settlement and move to the other side of town. Your settlement will be your replacement cost MINUS depreciation. That is the actual cash value. Replacement Cost – Depreciation = Actual Cash Value. Make sure your actual cash value is enough to cover your mortgage balance, moving costs, etc.

Liability: The more you have, the more liability you have. Most policies will cover you if the pizza delivery man slips on the icey sidewalk, or your babysitter breaks a leg trying to keep the kids out of the trees :-) . Expenses like medical care, court costs and other settlements decided on my the courts are usually covered to a certain point. Policies will have a maximum coverage amount for liability. Make sure your liability coverage covers your assets!

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December 25, 2008

10 Questions to Ask Your Home Inspector

Filed under: Home Tips, Real Estate Terms — Tags: , — Nichole Fredrickson @ 10:55 pm

Having a home inspection performed is an option that every home buyer has when in the negotiation process of the purchase. Not only does a home inspection allow you to get a closer look at the home and any problems that the home may have, but it is a great way to get to know your new home.

Allow a few hours to go through the whole inspection process. Before you have your prospective home inspected, there are a few things to ask your home inspector.

1. Are you a current member of the American Association of Home Inspectors?

2. Are you licensed with the State of Minnesota as a home inspector? How long have you been licensed?

3. In the average year, how many home inspections do you perform?

4. In regards to insurance, do you carry Error and Omissions insurance? Can you provide a copy of your insurance policy?

5. Do you have a list of past clients that I can contact?

6. Do you provide any guarantees on your inspections?

7. What does your normal inspection cover?

8. Do you provide a full report after the inspection? How long until I receive the report?

9. How long do you expect the inspection to take?

10. How much does the inspection cost?

You want to make sure that the inspector you use is licensed, and well versed in the type of home you are purchasing (condo, single family home, duplex, etc).

We work with a number of excellent home inspectors that have done amazing jobs for our clients. Feel free to contact me if you would like the contact info for them.

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December 18, 2008

Elko New Market Housing Affordability Index

Filed under: Real Estate Terms — Tags: , , , , , — Nichole Fredrickson @ 6:22 pm

 The experts agree, now is the time to buy. With the decline in mortgage interest rates last month to the five percent range, and now dropping even more, getting a mortgage is completely affordable. On top of historically low mortgage interest rates, the ‘median sales price’ of home in the south metro area is about 20 percent less than this time last year. That is now the lowest since the last quarter of 2001!!! Those two factors combine to make an extremely attractive housing affordability index. According to the Minneapolis Area Association of Realtors, the HAI (Housing Affordability Index) rose nearly 28 points from last December in the Elko New Market and Lakeville areas. That means the HAI is at 180, the highest point in the last 9 years.

When the HAI is up, that symbolizes a ‘good buy’ for buyers. Even though we have been experiencing a ‘buyers market’ for a couple years now, today is the best time to buy.  If you have been waiting for the perfect time to buy your new home, it is GO TIME. With a wide inventory in Elko New Market, Lakeville, Farmington and other areas of Scott and Dakota Counties, you will find just what meets your needs. Feel free to contact me at Nichole@NicholeFredrickson.com for more information.

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December 11, 2008

Take the Trauma Out of Homebuying

Filed under: Real Estate Terms — Tags: , — Nichole Fredrickson @ 9:26 am

So you are ready to make the wonderful decision of choosing a home! Congratulations! Although the process is fun and exciting, it can also carry stress. Below is the best list of tips to remember when you are ready to buy a home. If you have found other great ideas, please feel free to share them with us.
Just remember to be realistic about your timelines, and your goals, as well as your needs versus wants, and that should help too!

10 Things to Take the Trauma Out of Homebuying
1. Find a real estate professional who’s simpatico. Homebuying is not only a big financial commitment, but also an emotional one. It’s critical that the practitioner you choose is both skilled and a good fit with your personality.
2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.
3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.
5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.
6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.
7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
8. Factor in maintenance and repair costs in your post-homebuying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.
9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.
10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

For more tips on homebuying visit www.NicholeFredrickson.com

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2005. All rights reserved. www.REALTOR.org/realtormag

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December 9, 2008

Good Faith Estimates

Filed under: Real Estate Terms — Tags: , , — Nichole Fredrickson @ 3:00 pm

Clients ask, “What is a GFE?” A Good Faith Estimate is a document that is prepared by your mortgage lender during your qualification process. Most lenders will then update the GFE when you have found the exact property you want to purchase. It will outline the loan and the costs associated with securing that loan.

It will show you lenders fees. There is normally an origination charge, standard is 1% of loan price. If you are being charged more than 1%, you need to know why. There are processing fees, underwriting fees, appraisal fees and credit report fees. If there are a number of extra fees on your lenders GFE, you need to find out why.

There are closing costs on the GFE….. everything from escrowed homeowners insurance and ecrowed property taxes to keep in reserves to wire transfer fees.

The purpose of the GFE is to lay out for the buyer, what the costs of the loan are. Some will simply compare the bottom line, but i urge you to look at the entire GFE with scrutiny. You may pay $50  less with an internet giant, but with a trusted local company you will be better informed on the process and have LIVE people to talk to. Is that worth $50 to you?

The point is, if you are a first time home buyer or a seasoned investor, you need to know what the loan will cost. in some cases, the fees are simply junk fees and could be removed if the client asks. Other times it will show that you are not overpaying for the loan and it has nothing but the standard expenses attached to it. Unless you look at your GFE when you are buying a home, you will not know the answer to that question.

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