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Sept. 16, 2023

Working with us as your REALTOR

Working with us as your REALTOR

What qualities are you looking for in the person who will assist you in finding the perfect home, or the land to build it on, or that “just right” piece of commercial property to help realize your American Dream?  What’s all this business about agency relationships?  Why do I need to have a Buyer Representation contract with my agent? 

 

WHAT DOES A REALTOR DO?

 

It bears repeating that a home is most people’s largest single investment. With that in mind, the primary purpose of a Realtor is to provide you with PEACE-OF-MIND in the purchase of your home. The most important quality you are looking for in a real estate agent is TRUST. You want to be able to TRUST your agent to work hard on your behalf, to be very knowledgeable about the market, to listen carefully to your needs, to provide you with information and creative alternatives, and to always keep their promises. You can rest assured we take this commitment seriously!  The following is our pledge to you:

 

  • Be a good listener and understand your real estate needs

  • Help you determine the price home for which you can qualify.

  • Direct you to and encourage showings of, properties that fit your criteria: agency listings, MLS listings, For Sale By Owner listings and also properties that are not yet for sale.

  • Connect you with a mortgage consultant should you desire

  • Connect you, at your request, with a title insurance company which usually conducts the closing

  • Provide information and contacts on home inspection companies

  • Provide information and contacts on home insurance companies

  • Explain all of the forms that will need to be signed as they assist you in writing up the legal contract that constitutes your offer.

  • Represent you in all negotiations

  • Problem-solve and coordinate all parties to the transaction as you work toward a successful close in a timely manner.

 

 

AGENCY RELATIONSHIPS

 

Some state laws require that early in any real estate relationship, real estate brokers or salespersons discuss with consumers what type of agency representation or relationship they desire. An agency relationship is based on one person representing the interests of another person, and Real Estate Sales Associates, who are licensed by the State with a broker, represent a person for the sale or purchase of a property.

 

The type of relationship formed between the Sales Associate and the client is called a fiduciary relationship. A fiduciary relationship is one based on TRUST, as evidenced by the seven duties owed to the client: Loyalty, Diligence, Confidentiality, Reasonable Care, Obedience, Disclosure, and Accounting. The source of compensation does not determine agency, in that compensation can be paid by the buyer, seller, both, or neither (subject to restrictions under applicable state law).

 

Currently, there are several categories of agency relationships; the available options for MN are as follows:

 

 

 

 

The fiduciary duties mentioned above are listed below and have the following meanings:

Loyalty - broker/salesperson will act only in client(s)' best interest.

Obedience - broker/salesperson will carry out all client(s)' lawful instructions. 

Disclosure - broker/salesperson will disclose to client(s) all material facts of which broker/salesperson has knowledge which might reasonably affect the client's use and enjoyment of the property. 

Confidentiality - broker/salesperson will keep client(s)' confidences unless required by law to disclose specific information (such as disclosure of material facts to Buyers). 

Reasonable Care - broker/salesperson will use reasonable care in performing duties as an agent. 

Accounting - broker/salesperson will account to client(s) for all client(s)' money and property received as agent.

If Seller(s) decide(s) not to agree to a dual agency relationship, Seller(s) may give up the opportunity to sell the property to Buyers represented by the broker/salesperson. If Buyer(s) decide(s) not to agree to a dual agency relationship, Buyer(s) may give up the opportunity to purchase properties listed by the broker.

 

 

You should feel free to discuss these agency representation options with your agent since it is important that you have a thorough understanding of every aspect of the real estate transaction.

 

 

 

WHY SHOULD I HAVE A BUYER REPRESENTATION CONTRACT?

 

Recently buyers have become aware that real estate Sales Associates have considerable knowledge that could be of great assistance in deciding what property to purchase. It is important for you to understand that a seller’s agent works for and represents the seller, per the listing contract that is signed by both parties (the Broker, represented by the agent, and the seller) at the time of the listing agreement. In many areas of the country, buyer representation in the form of a contract signed by both the potential buyer and the Broker (represented by the agent) has become as prevalent as the traditional listing contract.

A buyer’s agent works for and represents the buyer. When a buyer is represented by a Sales Associate and their Broker via a Buyer Representation Contract, the seven fiduciary duties of Loyalty, Diligence, Confidentiality, Reasonable Care, Obedience, Disclosure, and Accounting are owed to the buyer as well.

 

When you hire us by signing a Buyer Representation Contract, you’re hiring us to protect your interests, negotiate, and represent you in any real estate purchase transaction. We guarantee a commitment to make every reasonable effort to locate the property described by the buyer and provide the seven fiduciary responsibilities to the buyer alone.

Posted in Buying Real Estate How To and Tips
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Sept. 14, 2023

Finding a Lender

Contact a Lender 

This is the path you’ll take towards the financing of your new home.  Learn about the different kinds of loans that are available, and what you need to do to qualify for them.  Once you’ve found a lender, you’ll work through how much home you can afford, what it means to be “pre-qualified” or “pre-approved”, and which personal finance records may be needed to facilitate the process.

 

HOW DO I FIND A LENDER?

 

Remember, a home is most people’s largest single investment, so count on recommendations from people you trust; family, friends and companies we have a great history working with. Start with financial institutions and their staff that you may have already established a long-term relationship with, but by all means don’t limit your options to just one lending institution. It is often wise to get a second (or third) opinion, since some lenders have more avenues open to them than others and are better able to tailor a loan to fit your personal needs.  We work with many lenders that can offer very competitive rates and still offer quality full service.

 

HOW MUCH HOME CAN I AFFORD?

 

We can all find beautiful homes in great neighborhoods that we would enjoy living in. Of course, our ability to make the down payment and monthly payments will probably limit most of us to more modest homes than our super dream home; we may need to look on our home purchase as a stepping-stone to our dream home. The key issues are our earning power, our debts and our assets to support the down payment and monthly payments.

 

WHAT DO THEY MEAN WHEN THEY SAY I NEED TO BE PRE-QUALIFIED OR PRE-APPROVED?

 

Pre-qualification is a very simple process and identifies what loan amount you are qualified to obtain provided you fit within all of the established guidelines. It takes into consideration the employment, income and debt information you provide to the loan officer. Your credit situation is NOT thoroughly examined and the loan package is NOT submitted to an underwriter for their review.

 

Pre-approval is a much more in-depth process and the most effective prior to shopping for the home you want. You will fill out a complete mortgage loan application and sign all of the required forms. Verifications are sent out to your employer (past and present), landlords, banks, and a mortgage credit report is generated. The completed credit package is then submitted to an underwriter, where they review the loan and approve or deny your application based on your credit worthiness. If they approve the loan, they will make their approval contingent upon a satisfactory appraisal and title search of the property you intend to purchase. This pre-approval will give you a better chance of having a seller accept your offer on a property, because they will know that you are credit approved and their transaction with you is less likely to fall through due to you being denied for credit. If you are asking for pre-approval, be prepared to supply for the lender:

 

  • Names and addresses of employers for the last 2 years

  • Most recent paycheck stub or stubs (1 month)

  • W-2 forms from the previous year

  • Last 2 months bank statements on all checking and savings accounts

  • Names and addresses of landlords for the past 2 years

  • Minimum monthly payments on all installment and credit card debt along with any balances remaining.

  • Monthly child support and alimony payments

  • Copy of divorce decree (if applicable)

 

TYPES OF MORTGAGES/DOWN PAYMENTS

 

There are basically 4 common types of mortgages although each category may have a number of variations, depending on which lending institution you’re dealing with. They are:

 

Conventional

Institutional loan that is not insured or guaranteed by a government agency.

Generally speaking the minimum down payment is 20% of the Selling Price of the home

 

Insured Conventional

A third party, not a government agency, has agreed to reimburse the lender for losses that result if the borrower defaults

Buyer pays the mortgage insurance premium with monthly payment (Private Mortgage Insurance or PMI)

May require as little as a 5% down payment

 

FHA

A loan made by an institutional lender and insured by the Federal Housing Administration, so that the FHA will reimburse the lender for losses that result if the borrower defaults

Minimum down payment (as little as 3 percent, depending on the particular program and size of the loan)

Seller can contribute towards buyers closing costs

Buyers down payment & closing costs can be gifted by a blood relative

Has more lenient qualifying ratios

 

VA

A home loan made by an institutional lender to an eligible veteran, where the Veterans Administration guarantees the lender for losses if the veteran borrower defaults

Zero down payment

Funding fee may be charged to the borrower, although it may be financed along with the loan amount

 

 

LOCKING IN THE INTEREST RATE/FIXED VS VARIABLE

 

Traditionally, lenders will require that the interest rate be locked in 10 days prior to closing. It is the buyer’s option if they want to lock or float at the time of an accepted offer.

 

  • Fixed rate loan-----a loan on which the interest rate will remain the same throughout the entire loan term, typically 15 or 30 years

  • Adjustable-Rate Mortgage (ARM)------A loan in which the interest rate is periodically increased or decreased to reflect changes in the cost of money.

 

 

 

 

GOOD FAITH ESTIMATES/CASH NEEDED AT CLOSING/APPRAISAL

Your lender will probably require as a condition of the loan that the property you are hoping to purchase be appraised by a licensed appraiser. The appraisal is an estimate or opinion of the value of a property as of a particular date and assures both the borrower and the lender that the price being paid is consistent with the selling price of comparable properties in the area.

 

MONTHLY PAYMENT

 

 

It’s been said that when you purchase a home, you are in actuality purchasing a monthly payment that you can live with. That payment will include Principal (the amount originally borrowed) and Interest, and escrowed amounts for property Taxes and property Insurance (which the loan servicer will pay on your behalf) and is commonly referred to as your P-I-T-I payment. If Mortgage Insurance is required by your lender, that premium will also be included monthly (P-I-T-I + MI)

Posted in Buying Real Estate How To and Tips
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Sept. 13, 2023

Plan Ahead When Buying

Whether you’re a first-time homebuyer or a more seasoned individual in the purchase of real estate, there are a number of good reasons to begin establishing, early on in the purchase process, a track record of thoroughly understanding the costs of buying real estate and the responsibilities of ownership.

 

Here are four recommendations for anyone who wants to position themselves for real estate ownership:

 

1. Establish good credit habits and a favorable credit history. Use your credit cards responsibly. Apply for an automobile loan and make your payments on time every month. If you’re currently renting, put your own name on the lease and the utility bills and make sure the rent and the bills are paid every month. If you’re already struggling with credit card debt, consider contacting a non-profit consumer credit counseling service to find out what you need to do right now to pave the way towards a favorable financial history when you decide to pursue a real estate purchase.

 

2. Start saving for a down payment and closing costs. It is possible, in many parts of the country, to purchase your first piece of real estate without much in the way of savings. New and innovative loan programs have evolved which require a 5 percent down payment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down. But in high-cost housing areas, starting to save early can be enormously beneficial because you’ll get the advantage of compounding interest and have a longer period of time to grow your investments. Even if you’re counting on the equity in your current home to provide you with settlement dollars for your next purchase, it’s best to get in the habit of making payments to yourself via relatively painless payroll deduction or recurring savings deposits with each paycheck.

 

In addition to a down payment, purchasers also need cash for closing costs (the final costs related to closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs. Understand, however, that less money down usually means higher interest rates and higher monthly mortgage payments, so most real estate purchasers choose to buy with some cash up front.

 

3. Educate yourself about financial management and buying real estate. Your local library and bookstore probably have at least a few shelves of books about financial management and buying real estate. In this day and age the World Wide Web can also be a valuable resource. Take notes, learn about real estate budgeting and credit, and try to make a financial plan for yourself. Become familiar with real estate terms to help you understand the process. Even if this is not your first purchase of real estate, be aware there may be certain terms and real estate "lingo" currently in use with which you are unfamiliar. Touch base with family members and friends who have recently purchased real estate to get their insight as to how the process worked for them, especially if their dealings were in the same community as yours. Frequently, communities have their own unique ways of doing things so it’s best not to assume you’re knowledgeable just because you’ve been down this path before.

 

4. Research the area where you’d like to live. Many people, especially the young, assume they’ll continue living in their own hometown forever, but our populace is getting to be more mobile than ever and chances are good you’ll one day live in another city or even another state. Again, the library, bookstore and World Wide Web can be excellent resources for information about:

 

 

Neighborhoods

Public/Private elementary and secondary schools

Public/Private Colleges and Universities

Shopping/banking

Governing branch locations: Federal, State, County, Local

Recreation/Sports

Entertainment/Dining

Medical/dental facilities
Posted in Buying Real Estate How To and Tips
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July 31, 2017

Curious About Local Real Estate?

Receive the Latest Local Market Stats

Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

Get Local Market Reports Sent Directly to You

You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates
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