Barker and Hedges Real Estate BlogRecently posted or modified blog posts in the category - Buying a Homehttps://www.barkerhedges.com/blog/Copyright BarkerHedges.com2017-12-06T10:45:35-07:00tag:barkerhedges.com,2012-09-20:3494When Is the Best Time to Buy?
When is the best time of year to buy? Brandon Hedges and I have the answer.
Buying a home? <a href="https://www.barkerhedges.com/property-for-sale/results/?dpn=matt">Click here to perform a full home search</a>
Selling a home? <a href="http://cts.vresp.com/c/?TheBarkerHedgesGroup/8a0fd4efd3/TEST/001e1fee98/dpn=matt">Click here for a FREE Home Price Evaluation</a>
Today I’m here with Brandon Hedges, my colleague here at the Barker Hedges Group, to discuss when’s the best time to buy.<br /><br />Our clients often ask us when is the best time of the year to get a great deal on a home, whether that be the price, the terms of their closing date and so on. Essentially, they want to know when the seller is going to be the most willing to negotiate with them.<br /><br />There’s kind of a cycle that we talk about a lot in real estate in terms of going from the peak to the valley and then back to the peak again, and 2017 has been no different. We see inventory build and we see inventory retreat.<br /><br />What we’re talking about now is what happens with pricing. We see price increases through the spring and early summer. Peak median sale price in the Twin Cities looks like it's going to be June, and it starts to make somewhat of a retreat the rest of the year.
"If you’re looking to purchase a home, the winter season tends to be the best time of year to do that from a pricing and negotiating standpoint."
It’s the same thing with original list price: Where people were listing their homes for sale has also come down a little bit. The combined effect of those two things is a little over 5% that we’re down from that peak time frame in June.<br /><br />The short answer to the question is that typically, November through January are the best months to buy in terms of pricing. There isn’t always the most selection at that time of the year, but that tends to be the lower part as far as pricing goes. It’s also a time when sellers might be a little more motivated. So if you’re looking to purchase a home, this winter season tends to be the best time of year to do that from a pricing and negotiating terms standpoint.<br /><br />We appreciate questions like these, and if you have any additional questions about this or other topics, don’t hesitate to give us a call or send us an email. We’d love to help you out. Make it a great day!<br /><br />2017-12-05T14:50:00-07:002017-12-06T10:45:35-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2832The Best Time of Year to Buy a Home<br />When is the best time to buy a home?<br /><br />Just as in selling a home, the answer to this question all comes down to supply and demand. As far as our buyers are concerned, they typically want the most amount of homes to see and they want to be able to bid the lowest amount possible when it comes to negotiation.<br /><br />Throughout the course of the year, we usually see inventory levels rise from January to December. It usually starts at the bottom in January, then ratchets up during the summer and fall months. During fall, the number of sales is usually inversely proportional to the number of listings. The later months of the year, then, tend to be the ones with the lowest amount of sales but the highest available inventory.<br />
“<br />
It all comes down to supply and demand.
”
<br /><br />We’re seeing the same trend happening again this year. Inventory levels are building as we speak. In January, the number of sales that take place almost double by the time we reach spring. That number usually stays level over the course of the summer, but dips once September rolls around. It then continues to decrease in the following fall and winter months until hitting the bottom again in January.<br /><br />So, if you’re thinking about purchasing a home, now is a great time to start that process.<br /><br />If you have any more questions about buying a home, please feel free to give us a call or send us an email. We’d be happy to help you in any way we can. 2016-09-13T13:14:00-07:002016-11-01T12:25:08-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2826How Contingencies Protect Twin Cities Home Buyers<br />We wanted to take a minute to talk about real estate contingencies today. They are an important part of every real estate contract because they can help buyers protect themselves if problems come up after earnest money has gone into escrow.<br /><br />There are two primary contingencies: for the inspection and for the financing. These are the two that we see come up in just about every transaction.<br /><br />We typically start with the inspection contingency. The inspections usually take place in the first week after contract, and the buyer has the opportunity to say whether or not everything checked out and if they want to move forward. Sometimes after an inspection, buyers will ask the seller to make certain repairs or something may get renegotiated.<br /><br />Then, we typically move into the second tier of contingencies, for the financing. Buyers need to be pre-approved in almost all situations to buy a property, and that’s because the seller will want assurance that the buyer actually has the means to buy the home.<br /><br />After the inspection, things shift to the lender to do their due diligence with the buyer. This is when the appraisal takes place in order to put a value on the property. Usually the contingency expires after about 30 to 45 days, and the buyer has to give the seller some sort of letter or statement letting them know they are approved for the mortgage and are ready to go.<br /><br />There can be other contingencies for association documents. In Minnesota, there is a 10-day review period for certain types of associations to look over documents, for example, or a buyer contract contingent on them selling their own home.<br /><br />We’d be happy to discuss other more specific contingencies with you at any time if you have questions. Reach out to us soon via phone or email.2016-08-15T08:49:00-07:002016-11-01T12:27:49-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2767How Should You Choose the Best Offer?<br />Buying a home? <a href="https://www.barkerhedges.com/property-for-sale/results/?dpn=matt" target="_blank">Click here to perform a full home search</a><br />Selling a home? <a href="https://www.barkerhedges.com/home-evaluation/?dpn=matt" target="_blank">Click here for a FREE Home Price Evaluation<br /></a>
Since our local housing marketplace currently favors sellers, home sales are likely to end up in a multiple offer situation. Today, we want to give advice to buyers on how to compete and thrive if they experience this.<br /><br />Conventional wisdom tells us the highest offer is best. However, that’s not always the case. There are other factors that go into making a decision. Although price can make up for all these factors, it isn’t always the most powerful.<br /><br /><img style="display: block; margin-left: auto; margin-right: auto;" src="https://assets.site-static.com/userfiles/441/image/MattBarkerPullQuote4.18.16.jpg" height="107" width="428" /><br />For instance, the strength of the buyer’s financing plays a huge role. There are different types of loans with different amounts of down payments out there. Additionally, sellers pay attention to whether the buyer uses a local lender or an online resource. A seller wants their agent to be able to call that lender and have a comfortable conversation with them about the offer.<br /><br />Another one is the closing date. As a buyer, if you have flexibility to close sooner or later, that could have a huge impact on the seller’s decision. A seller might want additional time or the ability to move as quickly as possible.<br /><br />Also, the inspection time period comes into play. An offer that requires a week and a half for an inspection might not look as attractive as one that requires three days. The seller likely will want the inspection completed within the least amount of time as possible.<br /><br />If you’re thinking about buying or selling a home in the surrounding Twin Cities area, contact us via phone or email. We’d be happy to serve your local real estate needs and answer any questions you might have!2016-04-18T10:40:00-07:002016-04-19T07:00:05-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2741Should You Buy a New Home or a Resale Property?<br />Buying a home? <a href="https://www.barkerhedges.com/property-for-sale/results/?dpn=matt" target="_blank">Click here to perform a full home search</a><br />Selling a home? <a href="https://www.barkerhedges.com/home-evaluation/?dpn=matt" target="_blank">Click here for a FREE Home Price Evaluation </a>
Today we want to speak to you about the difference between buying a new home and a resale property. Both have their pros and cons, and we want you to be informed about them.<br /><br />A newly-constructed home is advantageous in the fact that you have control over the design and layout. You can build it just like you want, so long as you have the funds. You can reflect your own style, and not someone else's tastes. New homes often come with warranties that cover mechanical devices for two years and structural items for ten years.<br /><br /><img src="https://assets.site-static.com/userfiles/441/image/MattBarkerPullQuote2.8.16.jpg" width="448" height="112" style="display: block; margin-left: auto; margin-right: auto;" /><br />New homes are often vastly more efficient when it comes to energy and insulation. Although they cost more upfront, you will see some energy savings over the long run as opposed to an older home.<br /><br />However, this is not to say that older homes and resale properties aren't worth purchasing. They are often more affordable, but you don't have an input on the design. You can change the interior to a degree, but not like a newly constructed home.<br /><br />Resale properties are often in more desirable locations, like the inner city. Newly-built homes are often located in suburban areas where more land is available. When it comes to architecture, nothing beats the charm of an old home. It's simply too expensive to build new homes replicating a Victorian or medieval revival style, so if you like unique homes you may want a resale property.<br /><br />If you're having trouble making a decision on this, please don't hesitate to contact me.2016-02-08T12:45:00-07:002016-02-09T10:19:40-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2734What Can You Expect from the Twin Cities Marketplace in 2016?<br />Buying a home? <a href="https://www.barkerhedges.com/property-for-sale/results/?dpn=matt" target="_blank">Click here to perform a full home search</a><br />Selling a home? <a href="https://www.barkerhedges.com/home-evaluation/?dpn=matt" target="_blank">Click here for a FREE Home Price Evaluation </a>
Where is the Twin Cities market heading in 2016? Last year was another wonderful year in our market, but will this be a year of change? Today, we take a look at the numbers to find out!<br /><br />Overall, 2015 was the best year in the Twin Cities market since 2005. Housing demand has reached a 10-year high, and home prices have fully recovered in most of the area. In 2015, the amount of closed sales increased by over 1%, median sales prices increased by 7%, and inventory was reduced by close to 18%. This is terrific news considering where the market was just a few years ago.<br /><br /><img src="https://assets.site-static.com/userfiles/441/image/MattBarkerPullQuote1.27.16.jpg" width="436" height="109" style="display: block; margin-left: auto; margin-right: auto;" /><br />One of the trends that will continue this year is the low inventory -- there just is not a lot to choose from out there. This will likely result in suburban growth, as the low inventory drives people to the edges of the city. A lot of the new communities we see popping up are more walk-able than what we've seen in the past. There are more grocery stores, coffee shops, and dry cleaners nearby, which is indicative of these more walk-able urban communities.<br /><br />Another thing we'll probably see continue to change is the condo and town-home market. It's starting to rebound from the hit it took during the downturn. The low inventory of single-family homes is driving more people into this market, so much so that builders are starting to build more of them. Again, this is all fantastic news for the health of our market.<br /><br />The one thing on everybody's mind is mortgage rates. What's going to happen with them? The most recent increase in the federal funds rate didn't make a huge impact on mortgage rates because, for the most part, investors had already priced that into the market. One thing to keep in mind is that mortgage rates are more tied to mortgage-backed securities than they are to the short-term interest rates the Fed sets. This means that we typically see -- in an economy that is becoming stronger -- interest rates rise over time. So, expect to see rates rise a bit in the coming year, but remember that the rise is indicative of a growing, healthy market.<br /><br />If you have any questions about our predictions for the 2016 market, or if you need real estate assistance of any kind, please don't hesitate to reach out to us. We would love to hear from you!2016-01-27T09:01:00-07:002016-01-27T09:10:39-07:00Barker Hedges Grouptag:barkerhedges.com,2012-09-20:2382Twin Cities Real Estate a Good Bet in 2013<img src="https://assets.site-static.com/userfiles/441/image/cape_cod_590.jpg" alt="minneapolis real estate" align="left" height="200" width="301" />Minneapolis real estate and other Twin Cities area communities had a good year in 2012 and it is expected that the trend will continue in 2013 for <a href="https://www.barkerhedges.com/selling/">home sellers</a>. A few things are <a href="http://www.twincities.com/business/ci_22356259/twin-cities-realtors-detail-recovering-2012-housing-market" target="_blank">working in our favor</a> here in Minnesota, as far as real estate sales are concerned. First, Minnesota has a <a href="http://minnesota.publicradio.org/display/web/2012/12/20/business/minnesota-unemployment" target="_blank">low unemployment rate</a>. And we don’t just mean “relatively low,” as it’s hovering just above 5 percent right now. Second, Minnesota, and in particular the Twin Cities area, has an <a href="http://www.city-data.com/us-cities/The-Midwest/Minneapolis-Economy.html" target="_blank">incredible employment base</a>. The state is home to huge corporations, small businesses, manufacturing, financial, creative, theaters, art. Being on the river, we even have longshoremen. Pretty much whatever you want to choose for a career, you can do here. This is leading to an influx in new residents needing housing.Third, <a href="http://www.usatoday.com/story/money/markets/2012/12/18/housing-starts-should-rise-on-low-interest-rates/1778429/" target="_blank">interest rates have been at historic lows</a>. That means that people who qualify for a home loan are able to take advantage of incredibly low prices that might not always be around.Fourth, thanks to the dwindling foreclosure rate and the three factors listed above, the <a href="http://kstp.com/news/stories/S2882597.shtml" target="_blank">inventory of homes </a>for sale has gone down from 20,000 to just 14,000 available homes on the market in 2012.The combination of forces above have finally combined to create the bottom of the <a href="https://www.barkerhedges.com/twin-cities-real-estate/">Twin Cities real estate</a> market, and now home prices are going up. The average home sale price went up 10 percent in 2012 in the Twin Cities. Of course, because real estate is highly local, prices aren’t rising everywhere, and they aren’t rising as high in all places, but for the most part it seems that the worst of the housing crash has passed. <br />Though there is some home buying seasonality, real estate purchases will continue to drive up prices in the Twin Cities market, particularly neighborhoods and communities that are more centralized. <br />Are you considering purchasing Twin Cities real estate in 2013? What is driving your decision – relocation, downsizing, upsizing, or other? We’d love to hear from you.2013-01-15T00:51:00-07:002013-07-10T10:37:22-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2379Q & A: Are You Ready to Buy a Home?
<a href="http://themoviemash.com/blog/wp-content/uploads/2012/10/house_for_sale1.jpg"><img src="http://themoviemash.com/blog/wp-content/uploads/2012/10/house_for_sale1-1024x1024.jpg" class="aligncenter size-large wp-image-14591" title="skd273191sdc" height="360" width="360" /></a>
Nationwide, it seems the housing market is heating up, just
as it does nearly every Spring and Summer – including in the Twin Cities area.
Even with those seasons passed, the interest rates are still low with plenty of homes available on the <a href="/twin-cities-real-estate/">Twin Cities real
estate</a> market. That considered, more and more Minnesotans are pondering if they are ready to
buy a home yet. There are many things to consider, especially for those who may
be <a href="/first-time-home-buyers/">first time
home buyers</a>.
Here are some questions and some possible answers to think
of if you are considering <a href="/buying/">buying
a home</a>.
·
Are you
planning to stay put? If the answer to this is no, you might want to
reconsider buying a home. If you think you are planning on stay in an area for
any less than 5 years, it may be worth it to really determine if buying a home
is right for you.
·
Have you
done your research? There is a lot of research associated with buying a
home. That includes what city or neighborhood might be best, where the real
estate you can afford is located, and even what types of amenities you would like to
live near. That’s not even including the financial impacts, such as what shape
your credit score is in, how much mortgage you think you can afford, and more.
·
How long
have you been sticking to a budget? If you haven’t been sticking to
a budget before you get a home, you’re probably not going to stick to it after
you get one. That could put you at risk for financial jeopardy.
Determine a budget – not just one to help you save for a house, but for how much
money you expect you will have to pay once that mortgage is yours. And the
insurance. And the taxes. Then make sure you stick to the respective budgets
when appropriate.
·
Do you
have a reliable income? This is very important. If you take out a mortgage
one month and the next month you lose your job, there isn’t a do-over. It’s
best to be well-established in a job at a stable company for at least a year
before applying for a loan. The longer you’ve been with the company, the more
reliable your job is considered to be.
·
Do you
have a down payment? This one is hopefully yes and as close to 20% of your
expected mortgage loan as possible. Though it is still possible to <a href="/why-rent-buy-for-zero-down/">buy a home
with zero down</a>, many home lenders are skittish and would prefer that you
have larger down payments than in years past.
Basically what these questions are getting at is, when it
comes to buying Twin Cities real estate, “Have you thought it through?” It’s a
huge financial commitment, the largest transaction that most people will make
in their lives. It has the potential to make or break your financial security. Thinking about
the answers to these questions is extremely important, especially if you are
preparing to buy your first home. We want you to take the plunge, but we want
you to do it in a financially secure way.
2012-10-31T18:09:00-07:002013-07-09T15:27:56-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2371Buying a Home Has Become More AffordableBuying a home is now more affordable than it has been in the last twenty years.That is, according to this <a href="http://money.cnn.com/2012/02/15/real_estate/housing_affordability/index.htm" target="_blank">CNN article</a>. Due to declines in home prices and nearly record-low mortgage rates, the National Association of Home Builders/Wells Fargo Housing Opportunity Index now registers a record level of affordability.According to the index, 75.9% of all new and existing homes sold during the three months ended Dec. 31 could have been comfortably purchased by families earning the national median income of $64,200.<br /><br />That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable.The National Association of Realtors reported that in January, home prices <a href="http://money.cnn.com/2012/02/22/real_estate/home_sales/index.htm" target="_blank">fell to their lowest</a> point in more than a decade, which has helped to lift the pace of home sales. The median home price in January fell 2% from December to $154,700. That's the lowest since November 2001, before the run-up in home prices that eventually crashed the market.The pace of sales rose to the highest level since May of 2010. The seasonally-adjusted annual sales pace of 4.57 million homes was up a bit from the revised 4.38 million in December. The last time homes sold at that pace, buyers were rushing in order to qualify for the $8,000 homebuyer's tax credit as it was about to expire.Unfortunately, despite the affordability and apparent signs of recovery, most Americans are having trouble <a href="https://www.barkerhedges.com/blog/category/buying-a-home/" target="_blank">buying a home</a>. The main reason is that potential home buyers are finding it extremely difficult to qualify for mortgages due to tightened lending standards. Borrowing troubles are even extended to successful builders.Don't let this news discourage you. Those who can squeeze some money out of a bank will be able to take advantage of rates that have consistently hovered at or near record lows.Here are three tips to help you buy a home:Seek out home buyer programs. Not all home buyer programs fell away with the economy, there are still plenty available if you are willing to live in the communities that offer them.Apply for mortgages as several banks. It may be discouraging after some banks turn you down, but some may make reasonable offers, too! Just keep trying.Don't bite off more than you can chew. If a bank makes an offer with too high of an amount or interest rate, move along - it'll cost you too much in the end to take on too much house or too much mortgage. Make your move soon, though! The spring selling season is ramping up and the value of <a href="https://www.barkerhedges.com/twin-cities-real-estate/" target="_blank">real estate in the Twin Cities</a> is sure to rise. Additionally, the 30-year <a href="http://money.cnn.com/2012/02/23/real_estate/mortgage_rates/index.htm" target="_blank">fixed mortgage rate just rose</a> for the first time in four weeks. The increase from record lows is due to the news that the housing market is showing some signs of improvement. Want help finding out if you could be a first time home buyer this year? Contact the <a href="https://www.barkerhedges.com/about/" target="_blank">Twin Cities Realtors</a> at Barker & Hedges to learn more.2012-03-04T17:05:00-07:002013-07-08T19:11:26-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2350Two Limited Time Home Assistance Programs in MinneapolisThere are two new assistance programs available in Minneapolis for home
buyers and home owners, but act fast because they are limited in
availability and funds.First, Neighborhood Housing Services of Minneapolis is offering home
buyers in North Minneapolis a $5,000 forgivable loan towards the down payment of a home if a purchase agreement is signed by May 31 and the
sale is closed by August 15. If the new owner lives in the home for 5
years, the interest-free loan will be forgiven. There are no income
restrictions for qualifying. Loan funds for this program are limited to
$100,000, so when it's gone, it's gone!Second, homeowners and buyers in foreclosure-impacted <a href="/minneapolis-real-estate/">neighborhoods
of Minneapolis</a> can apply to the City’s Rehab Support Program. It has a fund of $750,000 with which to finance to complete improvements, potentially increasing the home’s market value. The pilot program offers loans of up to $20,000 at zero-percent interest. Funding the City
received from the Minnesota Housing Finance Agency will be matched
dollar for dollar by the homeowner from any other source they choose.
Approximately 50 loans will be available through this program. The
program is available to qualified homeowners and buyers in neighborhoods
where 10 percent of the housing stock is in foreclosure. Eligible
neighborhoods are: Shingle Creek, Lind-Bohanon, Webber-Camden,
Cleveland, Folwell, McKinley, Jordan, Hawthorne, Willard-Hay, Harrison
and Near North on the city’s Northside and Central and Bryant
neighborhoods on the Southside. Check out the City of Minneapolis
website to view further restrictions.If you're a home owner or home buyer that fits these qualifications
in Minneapolis, it could be worth looking into these programs.2011-05-09T16:25:00-07:002013-07-03T01:51:45-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2332Twin Cities Housing Market in 2010: Frozen & DepressedLast year was the worst for home sales since the Minneapolis Area Association of Realtors began tracking home sales in the Twin Cities metro area nearly 10 years ago. The number of <a href="https://www.barkerhedges.com/twin-cities-real-estate/">Twin Cities homes</a> sold slipped in 2010 to 37,365, down 17% from 2009. It was even lower than 2008, which many industry experts had hoped was the bottom of the market. Median sales prices did rise a modest 2.3%.Rob Grunewald, associate economist for the Federal Reserve Bank of Minneapolis, said that while the construction industry saw more promising numbers during the last weeks of the year, a full thaw for the housing market isn't likely during 2011. "While the overall Minnesota economy is expected to recover moderately in 2011," he said. "The housing industry faces conditions that will likely keep home prices and building at relatively low levels."Though 2010 started off at a run due to the $8,000 federal <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyer</a> tax credit, once it expired expectations for the year were low. At the end of the April deadline, Twin Cities real estate sales practically stopped in its tracks. Prices didn't plummet drop significantly as expected because of an increase in sales of traditional listings and upper-bracket houses, while prices of lender-mediated foreclosure and short sales properties fell."It was like two different markets," said Pat Paulson, president of the Minneapolis Area Association of Realtors. He said that during the last week of April there were 1,460 pending sales, the highest weekly level since 2005. Since then sales have fallen to about 600 deals a week with the exception of the last couple weeks of the year.<br /><br />"The last half of the year is fresh in my mind, and I'd say it was disappointing," he said. "We knew there'd be a drop-off, but we didn't expect it to be such a steep drop. But the good thing is that prices didn't free fall."For 2011 the association predicts that sale prices will rise a few thousand dollars, to $175,000, but that depends entirely on interest rates and how quickly foreclosures are processed. Though interest rates have risen slightly to near 5%, the decline in sale prices has caused an increase in housing affordability. That's why sales agents are optimistic that the market will improve slightly, or at least stabilize.2011-01-21T11:42:00-07:002013-07-09T19:25:25-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2308Parade of Homes - Fall 2010The Parade of Homes will mark its 62nd fall event during its run from September 11 through October 3. The Parade this year will feature about 330 Twin Cities homes in 80 metro region communities that range in price from $144,900 to $3,485,000.The Parade of Homes is a resource for Minnesotans to see hundreds of new homes. The Parade was designed to encourage prospective home buyers to compare styles, locations, construction techniques and materials. It also helps people to find ideas and inspiration.Parade of Homes visitors can also attend more than 40 informative events. The new Showroom Tour includes 15 stops with the latest and greatest in appliances, cabinetry, bath fixtures, flooring, stone and landscaping products. Additionally, 29 local restaurants are featured on the Parade of Homes Restaurant Tour, each offering discount coupons for Parade participants.The Parade of Homes Remodelers Showcase will be open the final three days of the fall tour, Oct. 1-3. With 74 remodeled homes featured, there’s even more opportunity to explore.2010-09-06T14:32:00-07:002013-07-03T01:49:26-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2306Zero Down Payment Loans are back for Minnesota First Time Home BuyersMinneapolis and St Paul Zero Down Payment LoansNo Down Payment Saved? NO Problem!The Affordable Advantage program has arrived to Minneapolis - St Paul! We have been eagerly awaiting this <a href="https://www.barkerhedges.com/why-rent-buy-for-zero-down/">zero down payment loan program</a> for a few months. If you’re like many <a href="http://www.minnesotafirsttimehomebuyer.com/" title="Minnesota First Time Home Buyer" target="_blank">Minnesota first time home buyers</a>, saving down payment is tough with everything else you have to pay for. We get it! This couldn’t come at a better time – lower rates, super low home prices and it being a “buyer’s market.” Who could ask for more?<br />So what about the issues some people have when using FHA financing? Will this still be a problem? All loans can have their issues, but this is NOT an FHA loan. It is conventional financing so you have a better opportunity getting an offer accepted on a home that DOESN’T allow FHA financing – whatever that reason may be.Here are the stats on the program:<br />• No monthly mortgage insurance<br />• No down payment<br />• One unit single family, townhome or condo<br />• Minimum credit score of 680<br />• You need $1000 of YOUR money, not a gift<br />• Must attend the Homestretch class<br />• Must be a first time buyer<br />• Maximum income for a household up to 4 is $83900<br />• Seller can pay up to 3% of the sale price toward your closing costsLet’s hope this great program can be the one that makes you a homeowner in 2010!2010-08-18T16:24:00-07:002013-07-09T23:33:18-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2298Trulia Says Cheaper to Buy Than Rent in MinneapolisIs it cheaper to <a href="https://www.barkerhedges.com/why-rent-buy-for-zero-down/">buy a home</a> than it is to rent a home? In some cities, renting is more expensive than buying! Trulia.com recently released its new Buy vs. Rent index, ranking the top 10 cities in the United States where buying a home makes most financial sense. Minneapolis (and by close relation St. Paul and most of the metro area) has landed on that list. Though <a href="https://www.barkerhedges.com/minneapolis-real-estate/">Minneapolis </a>didn't see the same huge spike in real estate prices that other communities experienced during the housing boom, once prices started dropping, home ownership became really cheap. In Minneapolis, the average listing price for a home placed on the real estate market is $153,844. A 30-year fixed rate mortgage for that amount locked in at the rate of 4.638% APR would result in a monthly payment of approximately $768. The average monthly price for renting a home in Minneapolis is $1,700. Other cities where it is cheaper to buy than rent include Miami, Fresno, Phoenix, El Paso, and Las Vegas. Curiously, Minneapolis is the only northern city which landed on this list, while quite a few landed on the list where it's much cheaper to rent than buy. Cities where it is cheaper to rent include Portland, Seattle, Omaha, Cleveland, and New York.Ultimately, the decision to buy or rent is up to an individual or family's financial situation. Though homeownership enables people to build equity over the long term, the costs of paying for a home go beyond the monthly mortgage payment. Though no equity is built by renting, sometimes personal lifestyles may make renting a better choice.Considering buying a first home? Contact the <a href="https://www.barkerhedges.com/first-time-home-buyers/" target="_blank">Twin Cities Realtors</a> at Barker & Hedges o see how they can help you determine if buying a home is the right step for you!2010-07-04T18:16:00-07:002013-07-10T00:43:32-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2270Minneapolis and Saint Paul CityLiving Program RevivedMinneapolis Mayor R.T. Rybak and St. Paul Mayor Chris Coleman have jointly announced that $41 million in new funding has been pumped into the CityLiving Program. CityLiving assists first time homebuyers with purchasing homes in either city.The CityLiving Program offers below-market interest rates on mortgages in addition to help with down payments and closing-costs. Hmebuyers’ household income cannot exceed $92,290 and the purchase price for a single-family home can’t be greater than $276,870 in order to quality for the funding.“More people owning homes in <a href="https://www.barkerhedges.com/minneapolis-real-estate/">Minneapolis </a>and <a href="https://www.barkerhedges.com/saint-paul-real-estate/">Saint Paul</a> means more prosperity, more civic engagement and more vitality in our Minnesota’s core cities — and that’s good for everyone,” said Minneapolis Mayor R.T. Rybak in a statement. “For nearly 30 years, Minneapolis and Saint Paul have worked together through the CityLiving program to help 30,000 first-time homebuyers enjoy the benefits of city life.”In addition to the $41 million, each city has $500,000 available for assistance with down payments and closing costs.The CityLiving program is funded through bonds sold by the cities. Though the CityLiving initiative has been around for 30 years, it was not available last year because the credit crunch prevented the cities from selling the necessary bonds.Read more about the <a href="http://www.minnesotafirsttimehomebuyer.com/minneapolis-home-buyer-programs/">CityLiving Program in Minneapolis</a> and <a href="http://www.minnesotafirsttimehomebuyer.com/st-paul-home-buyer-programs/">CityLiving Program in Saint Paul</a>.2010-02-16T07:03:00-07:002013-07-08T18:11:57-07:00Matt Barkertag:barkerhedges.com,2012-09-20:220520 Reasons to Buy a HouseLooking through some older posts on this blog, I thought it might be time to highlight some oldies-but-goodies. There is still some great information in these posts, even if they are a few years old.<br /><br />Lately, we've been talking a lot about <a href="https://www.barkerhedges.com/why-rent-buy-for-zero-down/">buying homes</a>, but haven't talked much about choosing which home to buy. Well here are two posts from this blog's first few months which may be able to help. One of the first decisions you make when you begin to look for a home is whether to buy new or purchase an existing house. There are advantages and disantanges to each. <br /><br />First, read <a href="https://www.barkerhedges.com/blog/ten-reasons-to-buy-a-new-home/">Ten Reasons to Buy a New Home</a>. Then read <a href="https://www.barkerhedges.com/blog/ten-reasons-to-buy-an-existing-home/">Ten Reasons to Buy an Existing Home</a>. Between the two articles, they have a lot of information. They should help buyers to determine which type of housing is best for them.Be sure to tune in regularly for home buying and selling news, trends, and tips. 2009-10-07T21:57:00-07:002013-07-08T09:27:26-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2181First Time Home Buyer Federal Tax Credit: Act Now!Summertime is the busiest time to sell houses, which means that lenders are busy, too. Even though the federal tax credit for first time home buyers doesn't expire until December 1, now is a good time to buy. The volume of loans being processed is only going to get bigger as other people try to close on homes before the deadline. If you wait to buy something until October or November, you could miss out.<br /><br />If you are a <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyer</a> that qualifies and you want to take advantage of the federal tax credit, buy as soon as you can. Sometimes deals fall through and you're back to square one. Because the lenders are already busy, your purchase could be delayed. Problems with the lender or the seller could happen. You simply cannot take the risk.<br /><br />Great news! In case you didn't know, the tax credit can be applied for immediately after closing on your home. That meanns you can ammend your 2008 tax returns using the 1040x form and the 5405 (tax credit) form. As soon as the IRS has this, you will likely get your money within a few weeks. It's just that quick.<br /><br />What should you do? Get out there, start looking, buy your first house and reap the tax credit rewards. What's there to lose? Only $8000 if you delay! 2009-08-11T16:23:00-07:002013-07-04T12:54:06-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2140More Assistance for Twin Cities Home BuyersIt was less than two weeks ago I was telling you about some recently approved, enacted, or improved home buyer programs within <a href="https://www.barkerhedges.com/minneapolis-real-estate/">Minneapolis</a>, <a href="https://www.barkerhedges.com/saint-paul-real-estate/">Saint Paul</a>, and <a href="https://www.barkerhedges.com/st-louis-park-real-estate/">St. Louis Park</a>. Now I have even more to tell you about.
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First, the Ramsey County Housing and Redevelopment Authority has approved the acceptance of a $1.4 million federal grant to get buyers into suburban foreclosed properties in four target areas of Maplewood and Little Canada. The money in the Opening Doors program is to be used to buy property, demolish or fix up vacant buildings and provide financial assistance to qualified first-time homebuyers. Three parts of the program include:<br />
$100,000 for deferred loans for eligible buyers who purchase a property in one of the target areas. Eligible buyers will have incomes between 80 percent and 120 percent of area median income.
$350,000 in deferred loan financing for buyers of homes that need to be fixed up before moving in.
$807,000 to buy, fix and sell or rent five properties in the target areas. Once the homes are sold, the money would be used to buy, fix and sell or rent another property. The county would contract with for-profit and nonprofit developers.
The county applied for the grant, which comes from the Neighborhood Stabilization Program. The program, administered by the Department of Housing and Urban Development, is a nearly $4 billion initiative, approved last year as part of the Housing and Economic Recovery Act. The Opening Doors Program isn't in effect yet because the money hasn't officially been put in the county's coffers.
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Second, the Dakota County Community Development Agency has launched the Silver Lining Loan Program to help qualified buyers purchase foreclosed properties in specific areas of the county where houses stand vacant. The Silver Lining loans, funded by the U.S. Department Housing and Urban Development's Neighborhood Stabilization Program, has a number of specific requirements, some harder to meet than others. But if you meet the requirements, buyers may qualify for a $15,000 zero-interest loan.<br />Potential buyers must qualify for traditional fixed-rate mortgages but also fall below income limits. They must attend the CDA's home ownership classes. The house, duplex, townhouse or condominium must be in a targeted area of the county. And the bank-owned properties must be in good condition, have all appliances and be selling for no more than 85 percent of the appraised value.
The CDA has processed three loan reservations so far; the goal is to eventually help 30 to 35 home buyers, so if this is something that interests you it's time to get hopping.
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While looking this program up, I found the Give Yourself Credit program intended to help out home buyers, also in Dakota County.
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Give Yourself Credit! provides homebuyers with a Mortgage Credit Certificate which is a federal income tax credit (not a deduction) equal to 20% of the annual interest paid on a mortgage loan. The credit reduces the amount of federal income tax a homebuyer is required to pay which helps free up income to qualify for a mortgage loan.
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What's the greatest part of these programs? They can be used in conjunction with the $8,000 federal tax credit. Are you seriously thinking about buying a home yet? I am.
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Finally, a new website launched by both St. Paul and Minneapolis allows potential home buyers to click on any of the 80-plus neighborhoods in the either city and learn about every financial incentive available. Every. Single. One. That means from the federal level to neighborhood level.
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What's more, buyers can use the site to easily gauge the "walkscore'' for any house. The walkscore measures the home's proximity to nearby coffeehouses, parks, schools and other amenities. In the Twin Cities, that is a very hand feature to have. Buyers can check out their intended neighborhoods through embedded videos, related links, and testimonials from neighbors. The site can be found at www.livemsp.org.
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That's it for now. Don't worry, at this rate, I'll be back within a few weeks to tell you about even more home buyer programs. Stay tuned!2009-04-22T21:00:00-07:002013-07-09T22:05:47-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2128New Home Buyer ProgramsA new round of <a href="https://www.barkerhedges.com/buying/">home buyer</a> programs have started or will be starting soon in the Twin Cities.
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First, the Minneapolis Advantage program will help at least 200 people buy of foreclosed or vacant houses in targeted areas of the city. It offers as much as $10,000 in forgivable loans toward a down payment, closing costs or repairs for vacant or foreclosed single-family houses or duplexes.
Applicants who earn less than 80 percent of area median income ($64,720 for a four-person family) are eligible if they buy a foreclosed house or one vacant more than 30 days in these neighborhoods: Bryant, Sheridan, Lind-Bohanon, Venture Village, Whittier, Audubon Park, Holland, Phillips West, Cleveland, McKinley, Harrison, Powderhorn Park, Webber-Camden, Midtown Phillips, Folwell, Near North, Central, Willard-Hay, Jordan, Hawthorne, East Phillips or Beltrami.
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People earning less than 120 percent of area median income ($97,080 for four people) are eligible for help with purchases of such houses in the above neighborhoods plus the Corcoran, Bottineau, Regina and Victory neighborhoods. Some neighborhoods are adding to the city's incentives.
Please visit the Minneapolis Advantage program website to learn more.
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Next, there are two new programs to buy <a href="https://www.barkerhedges.com/saint-paul-real-estate/">homes in Saint Paul</a> that will begin soon.
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The first is the federal Take Credit program. Take Credit has a fund of $8 million worth of tax credits for qualified first-time homebuyers who purchase homes in St. Paul. It is meant to help up to 130 first-time homebuyers who meet certain limits on income and the price of the home being purchased. (I think this program applied to homes in Minneapolis, too, but the specific details for the city weren't provided - it is the Pioneer Press, after-all).
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The second program is specifically for St. Paul though, and that is what is being dubbed as the Heroes program. The Heroes that qualify for this loan program include veterans, members of the U.S. armed forces, firefighters, emergency medical technicians, paramedics, health care workers and certain public sector employees. The city will spend $500,000 to provide $15,000 loans to about 33 people in the heroes program
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Finally, there is a new program offered for people who want to buy <a href="https://www.barkerhedges.com/st-louis-park-real-estate/">homes in St. Louis Park</a>. To attract new homeowners, people who work in the city can get a $2,500 grant to buy a home there through the Live Where You Work program. For the purchase of a foreclosed house, Saint Louis Park will chip in another $1,000. The only prerequisites are that one of the owners must work in the city and that they meet the income caps. Grants do not have to be paid back, either so it's basically free money to buy a home as long as you also work in Saint Louis Park.
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So, there you have information on some of the most recent housing program to go into effect or are about to take effect. All this is on top of existing home buyer programs in the Twin Cities and an $8,000 federal tax credit for first time home buyers that make their purchase before December 1. If you've been on the fence about buying a house, it really may be time for you to take the plunge.2009-04-09T21:45:00-07:002013-07-09T15:59:35-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2119A Few Trends in Real Estate to ConsiderA few articles have popped up recently that are all interrelated and I thought that I would make a post that brings them all together. I also wanted to bring them to your attention if you are someone considering buying or <a href="https://www.barkerhedges.com/selling/">selling a home</a> this year, especially now as the busy real estate season starts winding up.
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It’s easy to go in chronological order to start, so the first article I’ll discuss is this one from early March that says that foreclosures drove U.S. home sales up 7% in 2008 after a 40% plunge the prior year. Deeply discounted real estate prices and the super-low interest rates being offered seems to have spurred some serious activity in this sector of the market. Nationwide, foreclosed houses sold at auctions or by financial institutions surged 177% for the year, and represented as much as a third of all activity in 2008.
<br /><br />The <a href="https://www.barkerhedges.com/minneapolis-real-estate/">Minneapolis </a>– <a href="https://www.barkerhedges.com/saint-paul-real-estate/">St. Paul</a> metro area hasn’t escaped this trend, for in the month of February, lender-mediated transactions in the Twin Cities represented more than 60% of all pending sales. The median purchase price of a “distressed” home in the Twin Cities was $125,000, while in traditional home sales, the price was $205,875. The low prices that distressed properties sell for is drawing down the price of traditional homes as sellers attempt to compete with banks. Nationwide (and statewide) foreclosure moratoriums are being proposed, but as far as I know, none have been enacted or followed-through with yet. There are some banks and lenders that are enacting their own moratoriums though. Some of them have caught on that lenders don’t make good Realtors! That’s what I’m for! :)
In some better news, existing home sales rose nationwide in February as home buyers take advantage of lowering sale prices and interest rates. According to Freddie Mac’s most recent weekly survey, record-low interest rates currently stand at 4.98% for a 30-year fixed rate conforming loan. Additionally, first time home buyers are being lured into the action by the $8,000 first-time buyer tax credit that was put into place part-way through February.
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Finally, new homes sales unexpectedly rose 4.7% in February, but as buyers make their way through a huge backlog of unsold homes, prices are continuing to fall. It’s still down from last year and the year before, but analysts had expected new home sales to continue to fall. It could have something to do with the adjustments that some home builders have been making to their marketing practices. Besides deeply discounting their existing homes, some custom builders are finding niches to appeal to, like constructing green homes, emphasizing smaller floor-plans, or even branching out into other areas of the home sale business. One Twin Cities home builder has even become what's known as a "woman-centric" builder, aiming its home design and marketing at women.
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If anything, this little round-up should show you just how different the current real estate market can appear, depending on which angle you’re looking at it. Though the market is typically down right now, there are different things that may or may not affect your home’s sale. And if you’re a buyer, with the low interest rates and tax incentives, now is the time to start looking for a house. In February, the median sales prices of homes in Minneapolis and St. Paul were an affordable $112,500 and $93,000 respectively. If you’ve been holding off on buying a home, it’s time to reconsider and take a look at what is out there.2009-03-25T11:06:00-07:002013-07-04T12:53:44-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2054The Trend Towards Truer Appraisals of Home ValuesWhen it comes to pricing your home for the market, many factors are taken into account. One of these will be “comps”: the comparable sales of other properties in your areas. Used as benchmarks in home real estate appraisals, <a href="https://www.barkerhedges.com/buying/">buyers </a>and <a href="https://www.barkerhedges.com/selling/">sellers </a>never used to be concerned about “comps” when real estate values were on the upswing.
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In this soft market, mortgage lenders recently have begun making these benchmarks a big deal. Because of the rapid decline in home values, instead of accepting sales of comparable properties that closed six to 12 months ago like in years past, lenders and mortgage investors now demand that appraisers include only the most recent comparable home sales, preferably using closings from the last 90 days to support their valuations.
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Mortgage lenders and investors are also pushing for more comprehensive data on local listings, pending sales and listing-price to selling-price ratios before they agree to fund a mortgage for pretty much any amount.
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As a result, more and more home sales are being complicated or stalled entirely as buyers demand that sellers lower their prices to reflect the lower loan amounts their lender was willing to provide. Prices are even being renegotiated after contracts have been signed. In some ways it can help the buyer by fetching a lower price, but if the sellers don’t agree to the new terms it can bring an end to talks. When lenders and sellers wouldn’t budge, transactions that had been a sure thing have fallen through.
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Some advocates say the tougher standards are producing valuations that are much more accurate to short-term changes in local price shifts. Opponents, on the other hand, say that the demands have contributed to valuations lower than the price on the sales contract, putting transactions in jeopardy. Additionally, if sales are slow in some places, there may not be enough comparable closings within 90 days for an accurate measure.2008-11-17T19:31:00-07:002013-07-09T10:30:53-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2047Minnesota First Time Home Buyer Website LaunchedAre you one of the many Minnesotans considering buying their first home while the real estate market is swinging towards a record-setting low point? You’re not alone! But with so many low-quality websites out there, how can you begin researching the process of buying your first home from a comprehensive site?
Look no further. We have launched the <a href="http://www.minnesotafirsttimehomebuyer.com/">Minnesota First Time Home Buyer Website</a> just for you and others like you. At this site, you can find information about federal first time home buyer programs, Minnesota state first time home buyer programs, and Minnesota county first time home buyer programs. Additionally, there is information regarding first time home buyer programs for Minneapolis and Saint Paul and neighborhood programs.
At this site, you can learn about mortgage terms and use a mortgage calculator to find an estimate of how much you could potentially spend on a home. You can register for a home buying seminar, where you will learn a wealth of information about the home buying process. Soon, other Minnesota first time home buyer resources will be available to cover various topics a <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyer</a> may not have considered in their quest, including the hidden costs associated with home ownership that aren’t generally discussed!
One of the greatest features of this site, though it is not active yet, will be a forum for Minnesota first time home buyers. Here, people in the area that are pursuing the same goal of owning their first home can discuss the buying process and other related topics. Stay tuned and check the new site often for enhancements and the activation of the forum!2008-11-05T13:54:00-07:002013-07-10T03:15:58-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2046Minnesota First Time Home BuyersWe just went live with our newest website that is 100% dedicated to <a href="http://www.minnesotafirsttimehomebuyer.com/">Minnesota First Time Home Buyers</a> !
First time home buyers will be able to locate all federal, state, county, city, and neighborhood grant monies available to them. The home buying process and much more will be covered. Check it out and let us know what you think!
Cheers!2008-11-05T11:23:00-07:002013-07-04T16:49:37-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2020Bad Credit? You Can Still Own a HomeThis week, I’ve been writing articles to help first time home buyers. On Tuesday, I wrote about the hidden costs of ownership and yesterday, I wrote about budgeting tips to help you get into, and keep, that first home. But what are you supposed to do if you have bad credit and you want to buy a home? It would be great if every person in the U.S. who wanted to buy their first home could just be approved for a low-interest loan immediately. That’s not how it works though, as not every <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyer</a> has good credit and a high score.
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Don’t despair, though, there are still ways for people with bad credit to accomplish the American Dream of buying a home. While having bad credit will mean that some first time <a href="https://www.barkerhedges.com/buying/">home buyer</a> programs will be unavailable, there are others which are still a good possibility. Whether or not these programs are a good option for you will depend on the status of your individual credit situation.
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Basically, the options of first time home buyers can be reduced to these two options.
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You can buy a house now through Housing and Urban Development (HUD) first time home buyer loan programs From the Federal Housing Administration (FHA). These programs should be the first place a potential first time home buyer with bad credit should look. FHA first time home buyer programs guarantee loans through normal, local mortgage lenders with a reasonable interest rates and just a 3% down payment. Additional information regarding Federal First Time Home Buyer Programs can be found here and here.
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There are also local and regional first time home buyer programs for which individuals may qualify. Some counties and cities within Minnesota have their own grant and loan programs for first time home buyers, including Hennepin County, Ramsey County, Dakota County, and Anoka County. Minneapolis and St. Paul have a combined program called CityLiving to help first time home buyers. Even some individual lenders may have their own ways of helping people with bad credit buy their first home. Additionally, Realtors, financial advisors, and mortgage lenders themselves may be able to point first time home buyers in the right direction for unadvertised local programs. It takes research and diligence to find a lender willing to take a risk on you, but you will most likely find someone willing to help you buy a home.
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You can buy a house later more easily if you can wait at least six months before you buy a home so you can repair your credit. Taking the time to repair credit and build up a credit score will provide a first time home buyer with a variety benefits. First, you are more likely to get a lower interest rate, which can save tens of thousands of dollars over the life of the loan. Remember, most mortgages are paid over a period of 30 years. You don’t want to be strapped with a high interest rate long after you’ve repaired your credit. The second benefit of taking the time to rebuild credit is that first home itself. You could be eligible to buy a bigger house or one in a better neighborhood if you repair your credit first.
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How do you rebuild your credit? You don’t need to spend extra money on a credit rebuilding service. Anyone can rebuild their own credit without much help. Here are the basic steps of how to do it:
Evaluate All 3 Credit Reports. Credit reports can be obtained from three main consumer reporting companies, known as Equifax, Experian, and Trans Union. You can contact them separately or all at the same time by going to annualcreditreport.com. According to U.S. law, every citizen can obtain a free credit report from each of the bureaus once each year from that website. Review all three credit reports for accuracy. If any errors are found, follow the instructions each bureau provides investigating and correcting bad information.
Pay Bills On Time. Timing is everything, and this is particularly true when it comes to repairing or maintaining credit. Promptly pay all bills on time, every time. Late payments do not reflect well on a credit report and will drag down credit scores.
Clear Out Debts. If you seek to buy your first time home but you have bad credit, you should pay off as much outstanding debt as possible. All debts that have higher interest rates should be paid first, moving on to debts with lower interest rates next. Paying off debt will have a positive impact on raising your credit score.
Reduce Credit Card Use. Reduce or eliminate your use of credit cards. Not only do they help you accumulate debt, you end up paying much more for your items due to interest. You might not want to actually close your accounts, as that can actually hurt your credit status. Whatever you do, don’t apply for any new credit accounts.
Avoid Other Credit Pitfalls. Do not file for bankruptcy, as this may prevent a first time home buyer from being approved for a loan for many years in the future. Other credit traps to avoid are tax liens and accounts in collection. These negative marks on a credit score will have a detrimental effect on a first time home buyer’s mortgage eligibility.
Just because you have less-than-perfect credit, doesn’t mean you can’t buy a home. Either with the use of special programs or some time spent cleaning up your credit and raising your score, you can accomplish the American Dream of home ownership.2008-09-25T06:10:00-07:002013-07-04T03:45:39-07:00Matt Barkertag:barkerhedges.com,2012-09-20:201910 Budgeting Tips for First Time Home BuyersYesterday, I wrote a post about the hidden costs of home ownership that <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyers</a> might not have thought about. It wasn’t meant as a discouraging article, it was meant to enlighten potential first time home buyers so they know what is in store for them. Today, I’m going to give some budgeting tips to go along with those costs. Following these tips could help first time <a href="https://www.barkerhedges.com/buying/">home buyers</a> reign in spending so they can buy the home they want and take good care of it.
Recognizing spending habits and making a budget is vital for first time home buyers. The responsibility of owning a home requires good money management skills and control over impulsive spending. For first time home buyers, creating a budget is the first step in saving money for a down payment before a home is bought and keeping ahead of finances after purchase. Additionally, if a first time home buyer runs into financial difficulty, knowing how to properly budget can mean the difference between keeping that first home or losing it. Here are some budgeting suggestions for people seeking to buy their first home.
When you create your budge, include all of your income and all your expenses. Plan your budget according to what your income is now, not what you expect it to be.
Don’t copy someone else’s budget, their spending plan isn’t going to help your situation. Develop a spending plan specifically suited to your family’s or your individual income, expenses, necessities, and future needs and goals.
Do what you can to plan ahead for the whole year. By having this long view, you will you have sort of a “road map” to where you are going financially. Having an extended budget will also help you determine how well you are following your budget plan.
Take the time to decide what your most important goals are for the future. After you’ve determined your goals, it’s much easier to spend your money on things which mean most to you or your family.
Develop a personal savings plan and pay yourself first. Try to save 10% of your income each month. If you can’t cope with saving10% right away, save a smaller amount, but do so regularly.
Stop wasting money on products or services you don’t need, including things like extra cable or cellphone features, magazine subscriptions, and health club memberships.
Don’t spend impulsively. Make purchases wisely by defining needs versus wants, comparison shop for lower prices, and have an understanding of value based on quantity and quality. This will help you determine if what you’re paying is worth it for the end result. If you take the time to think hard about it, you may find out you don’t really want to make that purchase.
Plan, budget for, and stockpile a savings account exclusively for home maintenance projects and repair. As a homeowner, you will need this money to cover any home repair emergencies you may have in the future.
Keep good records of what you spend, but don’t make it a complicated process. Remember, you’ll have to follow through with keeping records. Many people have no idea where their money really goes when it comes to accounting for each dollar. Trying to track every penny you spend will help you take control of your spending habits.
Review your budget and financial plan once each month. Scrutinize your expenditures and make any alterations to your budget which may be needed.
Most importantly, when you create your budget, try to keep to it. If at first you don’t succeed, try, try again. It’s important not to give up. If you are determined, you will eventually teach yourself how to keep within your budget.
2008-09-24T16:21:00-07:002013-07-10T09:17:26-07:00Matt Barkertag:barkerhedges.com,2012-09-20:2018The Hidden Costs of Home OwnershipI’m going to write a few posts about important things <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyers</a> should know before they take the leap into buying a home. If you are considering purchasing a home in the Twin Cities area, there are things to understand or do which can make transitioning into home ownership much easier. Additionally, simply having as much helpful information as possible could help you keep your first home once you have it.
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First, as the title of this post suggests, I’m going to talk about the hidden costs of home ownership which a first time <a href="https://www.barkerhedges.com/buying/">home buyer</a> may not Owning a home has been touted as the American dream for generations. Because dreams are supposed to be perfect, the liabilities of owning a home don’t tend to be talked about. Though buying a home offers advantages like housing security, tax advantages, and ultimately, no more housing payments after it’s paid off, if you are considering buying a home for the very first time there are some things you should consider first. It is a mistake to believe that a mortgage equal to how much you pay for rent is all that is needed to become a homeowner. Here are some costs of home ownership you might not have thought of which may impact the size of your mortgage, and the size of your home!
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Appliances
Most rental units have basic, necessary appliance like refrigerators and stoves installed. Lucky renters may even have a dishwasher, clothes washer, and dryer. When you buy a home, unless the previous owner agreed to leave their appliances in the home, it is your responsibility to buy these items. Some new homes have appliances installed, but even if you buy new construction, you will most likely need to purchase the necessary large appliance. That being said, if the home you buy comes with all the needed appliances, they will break down eventually. When they need repairing or replacing, home owners can’t call the landlord. The money will have to come out of your wallet.
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Utilities
As a renter, some of the utilities you use may be included in your rent. Your rent agreement could include electric, heat, water, sewage, garbage disposal, maybe even cable or other expenses. When you buy a home, these utilities will not be included in your monthly mortgage payment. You will have to pay for those utilities separately. But how will you know what the bills are like before you move in? When you find a home that you think you want to buy, ask the owner for estimates or copies of the utility bills for the past few months. Doing this may give you a good idea of how much you will have to pay monthly for utilities in a specific home. Remember that the size of a home will have a great impact how much electricity it utilizes and the price of heating or cooling it. Additionally, you may want to pay for satellite, cable, phone service, or internet services.
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Landscaping
For many first time home buyers, having a yard could be a great selling point for a home. You could even be anticipating planting shrubs and trees, growing vegetables in a garden, or adding color with some beautiful flowers. All those landscaping costs are going to ad up. As a potential first time home buyer, you may not have a few landscaping necessities like a lawnmower, weed eater, pruning shears, a snow shovel or blower, and other similar items. Many landlords tend to the landscaping, lawn mowing, leaf raking, and snow removal without the renter ever lifting a finger. Whether you plan is to take care of the yard on your own or hire someone else to do it, landscaping and yard duties will have its price.
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General Maintenance
Observation, time, money, and manual labor are all required in order to keep any home in good condition. Landlords make sure air conditioning systems, furnaces, sump pumps, plumbing, and electrical systems are all working properly and are well maintained. As you might have guessed, as a first time home buyer, this will be your responsibility. You should observe of what is “normal” for your home and the working parts within it. This way, you’re more likely to be tipped off problems early and prevent more costly repairs later on. It’s also an excellent idea to keep a record of any maintenance you do for future reference. It may be advisable to hire a professional inspector to evaluate your heating and cooling systems to make sure there are no safety concerns.
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Repairs
Even if you expect maintenance, the need for repairs are hard to anticipate. New homes tend to need less maintenance and fewer repairs while older homes will most likely need more attention. Either way, every home will eventually need something fixed. It could be a relatively simple fix, like installing tile in the bathroom, replacing shoddy carpeting, or repainting. Conversely, it could be more involved, expensive, and immediate need of attention like a leaky roof, a flooded basement, or buckling floors. Whatever needs repairing, as a home owner, you will have to cover the expenses. Homeowners should be prepared for needed repairs by having a few thousand dollars saved in an emergency repair fund for just such an occasion.
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Taxes
As a renter, you’re probably not concerned about property taxes. As a Minnesota renter, you may even qualify for a renter’s credit at tax filing time. Though it is true that as a homeowner, some of the interest you pay on your mortgage can be written off of your taxes, real estate and property taxes must be paid. The taxes you must pay will depend on where you live and the value of your property. Taxes vary by state, county, and city. For the most part, the larger the lot and home, the higher your property tax payment will be. Don’t be surprised: When you decide to buy your first home, research the property, school, state, and local tax rates for the specific places you seek to live.
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Insurance
As a renter, you may have renter’s insurance already, but when you buy your first home, you will absolutely need several types of insurance. There is insurance to cover the property itself, insurance to cover the personal possessions inside, and in many cases, mortgage insurance to cover the lender’s loss in case you default on the loan. All of adds up. When you buy insurance, make sure your buying the coverage you need. Shop around and explore different insurance options until you find the plan that fits your needs. One thing which is important to note for first time home buyers in Minnesota, where lakes, rivers, and streams may flood: Your homeowner’s policy does not cover flood damage.
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Disaster
You’re probably aware as a first time home buyer in Minnesota that there is the potential for natural disasters here. In the winter, the weight of snow can collapse roofs. During the spring, melting snow and rains cause overrun rivers and flood houses. In the summer, tornados can reduce a home to toothpicks. If a disaster like this occurs, it’s up to you, the homeowner, to determine rebuilding or repairing plans for a destroyed or damaged home. As I said before, insurance can be bought to cover a lot of disasters. If you have good homeowners insurance, not all damages will be covered in full but the cost to a home owner will be much less than if you had no insurance.
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By mentioning these expenses, I am by no means trying to discourage anyone from buying a home. In fact, just the opposite. It’s important for first time home buyers to know as much as possible before they make the home ownership plunge. The more you know, the less likely you are to bite off more house than you can afford. By knowing what types of expenses to expect, first time home buyers can more accurately determine how much they can afford to spend on buying a house.2008-09-23T17:29:00-07:002013-07-09T16:43:17-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1956June is Home Ownership MonthFor many citizens, owning a home is the very definition of American freedom and independence. Having your own home or real estate has been the American dream since before the Homestead Act. Because of how important home ownership is to Americans, June has been declared National Homeownership Month. All through the month of June, local and national organizations around the country will draw attention to the benefits of home ownership and encourage responsible home ownership. As of today, about 70 percent of Americans own their own homes at this time.
According to the National Association of Realtors, this month is also the 40th Anniversary of the Fair Housing Act.
On April 11, 1968 President Lyndon Johnson urged congress to approve the Fair Housing Act just one week following the assassination of Dr. Martin Luther King, Jr. as a tribute to Dr. King's legacy and commitment to civil rights. One of the Act's central objectives was to prevent discrimination based on race in the sales or rental of housing. This historic Act has since empowered people from all races and ethnicities to pursue the dream of equal access to housing.
In 2002, President George W. Bush designated June as National Homeownership Month. The goal of drawing such attention to home ownership at that time was to increase minority homeownership in America by 5.5 million by the end of the decade. At this point in time, the rate of minority homeownership has climbed to above 50 percent.
During "Home Ownership Month," three sessions are available for first-time homebuyers to attend called "Opportunity Knocking: Get the Facts for First Time Homebuyers". These sessions are sponsored by the Minnesota Home Ownership Center, Bremer Bank and Freddie Mac. The discussions are opportunities for potential first-time buyers to learn about the process of <a href="https://www.barkerhedges.com/buying/">buying a home</a>, visit with lending and real estate professionals, and discover home-buying resources and services. Here, prospective buyers can connect with and share information with other people who may be thinking of buying a home.
The events are scheduled for the following days:
Thursday, June 12
6:00 p.m. – 7:30 p.m.
Roseville Library, Meeting Room
2108 Hamline Ave N, Roseville, MN 55113
Tuesday, June 17
4:00 p.m. – 5:30 p.m.
Richfield Community Center, Richfield Room
7000 Nicollet Ave S, Richfield, MN 55423Saturday, June 21
11:00 a.m. – 12:30 p.m.
Brookdale-Hennepin Area Library, Meeting Room C
6125 Shingle Creek Pkwy, Brooklyn Center, MN 55430
One of the events is happening today, so plan accordingly if you would like to attend that session. As you can see though, there are two other sessions available within the Twin Cities! If you are a <a href="https://www.barkerhedges.com/first-time-home-buyers/">first time home buyer</a>, you may really benefit from attending one of these events.
Also, Barker & Hedges offers first time homebuyers and home buying veterans alike the opportunity to attend one of our free, monthly home buying seminars. At one of our events, all aspects of the Home Buying process will be covered including: How to pick a Real Estate Agent, What types of loans are available, How much money you will need for down payment, Home Buying Tips, Agency Disclosure, The Home Buying Process, and the Purchase Agreement from start to finish. You can register for our next event here!
2008-06-11T06:55:00-07:002013-07-09T12:12:46-07:00Matt Barkertag:barkerhedges.com,2012-09-20:193810 Common Mistakes First Time Home Buyers MakeThe Minneapolis Area Association of Realtors, have provided in the consumer section on their website a list of the five most common mistakes <a href="https://www.barkerhedges.com/first-time-home-buyers/" target="_blank">first-time home buyers</a> often make. If you’ve been considering purchasing a home for the very first time, you should know that there are plenty of costly errors which can be made! Fear not, you can avoid the common mistakes that first-time homebuyers tend to make if you are aware of the pitfalls.
1. They don’t ask enough questions of their lender and miss out on the best deal.
Making the right choice when finally signing your name to your first home mortgage can mean a difference of thousands of dollars in interest paid over the long haul. For many, this 15 to 30 year mortgage commitment is the most important financial decision they’ll ever make. When you think about it that way, it makes sense to collect as much information about the financing of your home as possible. Don’t rush into anything that involves buying a house. Take the time to thoroughly investigate all financing options available to you.
2. They don’t act quickly enough to make a decision and someone else buys the house.
The purchase of a first home can be a lifelong commitment which requires time, thought, and contemplation in order to reach a decision. At the same time, hesitation can cause you to lose the house of your dreams as someone else makes a move. In a seller’s market, buyers will tend to look at fewer homes and make a decision to buy a home quickly because other buyers could be waiting to snatch it up. In a buyer’s market, people will take their time choosing. But either way, you never know when a home is going to sell. If you find a house that you like within your price range, make an offer. If you wait, someone else may purchase it and then you’ll be back to searching for the right home.
3. They don’t find the right real estate professional who is willing to help you through the homebuying process.
It is just as important that you chose the right Realtor as it is to pick the right home. This person will be representing you and helping to lead you to the home of your dreams. Having the wrong person during this transaction can lead to stress and irritation. The right Realtor will be helpful to you throughout the home purchase process and can match you up with the right mortgage, the right neighborhood, and the right home.
4. They don’t do enough to make their offer look good to a seller.
If your offer isn't attractive to the seller, the home you seek could be sold to another buyer with a more appealing offer. Pre-qualification can give an idea of how much money you might be able to borrow, but a loan has not been applied for and your financial information has not been verified. A firm approval from your lender will let you know exactly how much you can spend on a home. It will also let sellers know just how serious you are.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.
If you don’t plan on staying in the home for more than five years, knowing what other people want in a home will make selling the home easier when it is time to move on or move up. Do some research ahead of time in order to find out what most buyers want in a home. Knowing what other people are looking for will help give you an idea on what is worth compromising on and what is not. Planning this way can also give you a little extra equity when resale time arrives.
But wait! I said that MAAR had provided five home-buying errors, but the title of this post says there are ten common mistakes. What gives? Well, we here at Barker & Hedges feel that there are a few important points which MAAR didn’t address. We’ve included them as errors 6 through 10. Here are five more common mistakes which were not covered by MAAR’s list:
6. They don’t think about paying off existing debt first.
This is one of the most common mistakes people make before buying their first home. They focus so much on saving money for a down payment that they don’t think about paying down other debts first. Your existing credit can affect your buying power just as much as your down-payment can. Eliminating high-interest debt and credit-cards is important, even if it means collecting less for your down payment. Lenders won't allow your total monthly debt service to exceed 40% of your gross income. Pay down existing debts first before taking on the immense debt of a home mortgage.
7. They aren’t the first person to look at their credit report.
You can get a free copy of your credit report once every 12 months thanks to Federal Law. Knowing what kind of information is on it before anyone else does can help you enormously when you try to discover how much you can borrow. The information in your credit report will determine your credit score, which will in turn determine how much money you can borrow. If there is incorrect information on your credit report, you can dispute it with the credit agency to have it changed or removed. Disputing errors can help raise your credit score. Generally, the higher your credit score, the better interest rate and loan you can get. If your score is low due to late or missed payments, you can take action by making your payments on time to slowly raise your score.
8. They get in too deep.
Whatever you do, do not venture outside of your budget or over-extend yourself when buying your first home. You could be disappointed you don’t get approved for that much mortgage. Or it could be worse: you could get the loan and end up in foreclosure if you are unable to make the payments later on. There are steps you can take to avoid getting in too deep. Monitor your expenses for several of months. From this information, develop a budget that reflects your lifestyle accurately. Talk to a Realtor about what expenses you can expect with a new home. Then, review the budget you made. You may find that it needs revision.
9. Waiting until you find a house to get pre-approved.
During the search for a home, in addition to finding the perfect house, buyers must take a hands-on approach to finding reliable financing. Before you start looking, move beyond pre-qualification and get pre-approved through your chosen lender. Though pre-qualification can tell you how much you can afford, pre-approval will actually clear you for a loan of a determined amount. When you find that home, you don’t want to be scrambling for pre-approval to make your offer more appealing to the seller. Someone else with more forethought can simply pounce and make an offer. By the time you’re ready, someone else could be moving into your dream home.
10. They alter their financial picture prior to closing.
Imagine this: you have been pre-qualified for a loan, found that perfect house, and closing is just one week away. Does this situation scream “Buy a new car?” No, no, no, this is not the time to be financing large purchases (besides your home) and it is not the time to open a new high limit credit card. Adding on a car payment or revolving debt which did not previously exist when you began your home search could ruin your chances when it comes to closing time. Even slight alterations in your credit ratios could cause a loan application to be denied. Wait for that new car or credit card until after the deal has been sealed.
These mistakes can be avoided as long as you are aware of them! There are others out there lurking, of course, but these are the big ones. Make your first home purchase a positive experience by researching and educating yourself. Then set out for a smooth transaction!2008-05-19T07:08:00-07:002013-07-04T12:53:04-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1937Second Home SeasonSpringtime is a very popular season for <a href="https://www.barkerhedges.com/buying/">buying a home</a> or <a href="https://www.barkerhedges.com/selling/">selling a home</a>. So it would naturally follow that springtime is also the season for a buying second home. You know Minnesota residents love their cabins “up north.” Many other Minnesota residents see dollar signs at the thought of generating income by renting out a home to tenants.
According to the National Association of Realtors®, second-home sales fell along with the overall housing market in 2007. However, nearly a third of all homes purchased nationwide last year were either vacation or investment properties. In 2007, sales of vacation homes were down 30.6 percent while sales of homes intended to be investment properties fell 18 percent compared to 2006. An uncertain economy and the credit crunch which the U.S. has been experiencing contributed to the sales decline.
Whether you want a vacation home or a rental property, purchasing a second home can give you many of the same benefits as your first home. It is important to understand the tax implications before you buy, as depending on how you would like to use the property, they are different. Knowing the differences can help you make the most of your second home investment.
Let’s talk about the money, as investing in a second home could potentially give you advantages several ways. The first scenario is if the property will be a “second home” or vacation property. If you are going to purchase a vacation home, the interest you pay on the mortgage is tax deductible, just like your first home.
The second scenario is if the home will be strictly a rental property, you can use it as a source of income, although the tax implications will be different. You cannot deduct the interest from a mortgage on a rental property and you must report rental income to the IRS. Although you can’t deduct mortgage interest for an investment property, you can deduct operating expenses like maintenance and advertising costs that exceed the rent you collect, as well as losses on the sale of the home. Neither is deductible for a second home.
The third scenario is a little bit of column A, and a little bit of column B. Your second home can serve a dual purpose as a rental property and a vacation home at the same time. If this is your plan, you must personally use the home 14 days per year or one day for every 10 days it is rented out, depending on which is greater.
Now, let’s talk about the lifestyle benefits. If your second home will serve as a personal getaway, it could serve as your own private vacation spot. A lake-side cottage or a cabin in the woods can by your retreat from the stress of daily life. Just think about how your weekends will change, knowing you have a place to which you can escape and relax. The quality time you could get with your family and friends is very appealing.
That sounds great, right? There is at least one thing to consider though: Mortgage lenders are tougher on second-home loan applications than on primary-home loans. The reason for this is obvious, as by definition, the finances of a second-home buyer are stretched thinner. The result is that second-home rates tend to run one-quarter to one-half point higher than those of first residences.
That being said, the current atmosphere surrounding second-home lending is lenient compared to previous years. The typical second home buyer tends to be more affluent than single home buyers, which make these consumers valuable to lenders. It is important to determine your finances ahead of time to ensure you can afford it before approaching a lender. Second homes are not for everyone!2008-05-18T11:28:00-07:002013-07-09T21:21:46-07:00Matt Barkertag:barkerhedges.com,2012-09-20:19277 Reasons to Own Your Own HomeThe Minneapolis Area Association of Realtors, in the consumer section on their website, has a list of seven reasons to own your own home as opposed to rent. <a href="https://www.barkerhedges.com/first-time-home-buyers/" target="_blank">First time home buyers</a> don’t always have all of the information available to them as to why owning a home can be so much better than renting a home. If you’re considering ditching the landlord and <a href="https://www.barkerhedges.com/buying/">buying a home</a> for the very first time, here are some things to consider.
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1. Tax breaks. According to the U.S. Tax Code you can deduct the interest you pay on your mortgage, property taxes, and some of the costs involved in buying your home. This one is so self-explanatory, it is hard to expand on!
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2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the National Association of Realtors®. Additionally, the number of U.S. households is expected to rise by 15 percent over the next decade, which will continue the high demand for housing.
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3. Equity. If you’re paying rent, you might as well be throwing money out of the window. You’ll never see again, and when you move out, you will have nothing to show for it. Mortgage payments allow you to build equity ownership interest in your home with every payment you make. When owning a house it is possible to gain equity value in several different ways, including housing supply and demand, new commercial developments nearby, new schools in the area, and new highway access, just to name a few.
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4. Savings. Continuing on along the equity line of though, your home can be like a large-scale piggy bank. Building equity in your home is like building interest in a bank account but only at a more rapid pace. You add money to it with every mortgage payment you make, minus interest and fees of course. When you sell, you can generally take up to $250,000 if you are single or $500,000 for a married couple as gain without owing federal income tax. In addition when you sell your home, you can take a tax deduction of $250,000 or $500,000 for a married couple as long as you have owned your house for 2 years.
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5. Predictability. Unless you’re stuck in an adjustable rate mortgage, your mortgage payments don’t go up over the years, unlike rent. How much? Only your landlord knows. You don’t need that kind of worry. The longer you are making payments on your home, your housing costs may actually decline. Do keep in mind, however, that property taxes and insurance costs will rise. As mentioned earlier you can also write off the interest on your mortgage, though.
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6. Freedom. Renting a home usually limits the amount of decorating that you are able to do. When you own your own home, you can decorate any way you want and benefit from the investments you make in the home. What is more, if you need more space, you can add on to the home! Home ownership also offers advantages which make life more enjoyable, such as backyard barbecues, family gatherings during holidays, a home office or workshop, and all of this and more can be done in the privacy of your own home.
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7. Stability. Remaining in one neighborhood for several years gives you a chance to throw down roots. You can establish long-lasting friendships you’re your neighbors and participate in community activities. Additionally, children can benefit from growing up in the neighborhood of your choice at schools you decide on.
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Why would you pay someone else rent when you can put that same money towards a home of your own and reap all of these benefits?
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If you would like to learn more about purchasing a home in the Minneapolis market, a Minneapolis home buying seminar is a great place to start. There are upcoming home buying seminars in the Minneapolis Metro Area. <a href="https://www.barkerhedges.com/free-upcoming-home-buying-seminar/">Register</a> to attend a Barker & Hedges home buying seminar for free.2008-05-01T20:00:00-07:002013-07-09T08:58:32-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1925Special Considerations for Vacant HomesProblems are much more likely to occur in homes that are left unoccupied for any extended period of time. With a large inventory of <a href="https://www.barkerhedges.com/property-for-sale/results/?foreclosure=true">foreclosed </a>and vacant houses on the market today, <a href="https://www.barkerhedges.com/buying/">home buyers</a> should be aware of issues that often arise when a home is not maintained regularly. While these homes can often be purchased at a bargain, anyone considering a house which has been vacant for a while should pay close attention to their condition. Here are a few things to be aware of when buying a vacant property.
One of the obvious things that can happen to a vacant home is vandalism. From broken windows and spray paint to the theft of copper pipes and wires, it does happen. This means that you may end up having to make some repairs yourself. Sellers may also make sub par repairs themselves to save money, which may mean even more work.
Fluctuating temperatures in vacant homes as the weather changes unpredictably can lead to cracks around windows and in weather stripping. Moisture and temperature changes in wood can also cause cracks in plaster and drywall.
If the furnace has been shut off for a long time, ensure to have them checked for leaks or rust build up. Heating systems usually dry moisture which may be in the home. Without heat, the moisture can create rust, or worse, mold. Air conditioning systems may also need to be inspected and possibly recharged to work properly.
Plumbing problems can arise with unused drain pipes. Some are more susceptible to waste blockages and solidifications, while others may be at risk for sediment buildup. Additionally, washers and gaskets may shrink, which may cause pipes and fixtures to leak.
Sediment buildup from stagnant water in an unused water heater can impair its function. Turning the water heater on improperly after a time spent in disuse can cause thermal shock, leading to leaks and even failure.
Appliances such as dishwashers, washing machines, clothes driers, and garbage disposal motors can freeze up. Also, as with the plumbing, their seals can dry out and leak after a period of disuse.
There are the obvious problems that can occur with dust and dirt! Without the ventilation systems running to move air and filter pollutants, dust, dirt, and cobwebs can settle throughout the home.
This is Minnesota, a land full of 10,000 lakes and an abundance of wildlife. Beyond small rodents, there may be a raccoon, possum, or other animal setting up shop in a vacant home.
When roof and drains are not properly maintained and cleared of debris, roof leakage may occur due to water buildup. Deferred maintenance of flashings can be another source of leaks.
Soil expansion can also occur after the dry yard of a vacant property is properly watered by a new homeowner. This could have unexpected affects on the home’s foundation.
If you plan to purchase one of these homes, have it inspected carefully by a professional. Based on the results of the inspector’s report, a buyer considering a vacant home should rely on the expertise of a real estate professional to assist in negotiations for repairs or price adjustments. Even then, it may help to set aside some cash in the event an unforeseen problem presents itself after you’ve move into the house.Trying to sell a vacant home? Check out our <a href="https://www.barkerhedges.com/blog/tips-for-selling-a-vacant-home/">Tips for Selling a Vacant Home</a>. 2008-04-29T09:22:00-07:002013-07-04T16:50:15-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1921‘Tis the Season to Do-It-YourselfWith the weather warming up (and hopefully drying out… SOON), many Minnesota residents are gearing up to make improvements and repairs to their homes. Some will hire a professional, and some will do it themselves. When it comes to home repair, sometimes doing it yourself pays off - especially when trying to <a href="https://www.barkerhedges.com/selling/">sell a home</a>. Other times, it doesn't.
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The idea of doing it yourself sounds great, at first glance. It can save you money on both labor and materials, you can learn new skills, sharpen existing knowledge, and improve your home at the same time. But it isn’t without its risks.
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The key to avoiding an expensive mistake is knowing when to pick up the hammer and when to pick up the phone. When it comes to home improvements, you must know you’re limits. If you start a project you are unable to finish, you'll simply spend more money getting it fixed.
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Here are a few home improvement tasks you might want to consider leaving to the professionals:
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Anything involving Wires. In Minnesota, all electrical wiring work must be completed by an electrician licensed by the state. However, you can do electrical wiring in a home which you own and live in. All electrical wiring must be inspected by the State Electrical Inspector. Beyond the legalities, consider that 95 percent of electrical fires are due to homeowners who installed wires improperly.
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Anything involving Plumbing. As with wiring, all plumbing work must be completed by a plumber licensed by the state, but a resident who owns a home and lives in it can apply for the proper permits to carry out the work. A plumbing permit is required to replace or install fixtures, replace or install water piping, replace or install a water heater, and to connect gas appliances to gas piping (stoves, dryers, or fireplaces). A mechanical permit and a licensed contractor are required when it comes connecting a furnace. A permit is not required to reset an existing fixture. One thing to think about when it comes to plumbing is if anything isn’t sealed correctly, the resulting water damage could be quite costly.
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Demolishing walls. If you make a mistake and remove the wrong wall or beam, you could find yourself with an unstable home or roof problem. This should very strictly be left to the professionals. Only an engineer can properly determine what can be removed and if additional support is needed.
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Installing windows and doors. Changing doors and upgrading windows requires precise measurements. In many cases, it can be hard to understand the nuances involved with sizing and placement. What good is installing those brand new energy efficient windows if you have a 1/4 inch gap around the frame? If a larger window or door is installed (see previous statements about “wall demolishing), there's also a risk that a stud that supports the house's structure could be removed by mistake.
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Some Roof repairs. Obviously, repairing a roof high off of the ground is inherently dangerous for obvious reasons. People are injured and even killed every year performing their own roof repairs. However, a poorly installed roof can also lead to water damage inside your home as well. When it comes to fixing the roof, be sure you know what you’re doing.
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Building decks. Properly built decks have to be constructed to certain specifications. In Minnesota, building permits are required for all decks that are attached to the home or are 30 inches or more above grade. Decks and platforms not more than 30 inches above adjacent grade and not attached to a structure with frost footings, do not require a building permit and may require a zoning or land-use permit. Decks and platforms are required to meet the land-use requirements of the community’s zoning code.
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Chemical or heat stripping of woodwork. This job can be dangerous if what you're stripping contains lead. A certified lead carpenter or licensed lead abatement specialist should definitely be hired for this task.
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If you're not particularly handy, but you want to expand your skills, you should start out relatively small. Try painting a room, hanging a medicine cabinet or shelves, perhaps even installing new moldings. These are some fairly simple tasks for a beginner do-it-yourselfer. By starting small, you can discover what you’re capable of and hopefully it will help you understand when you should call the professionals.2008-04-25T13:30:00-07:002013-07-08T01:40:32-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1900The Pre-Purchase Home InspectionWhen you purchase a home, it's a good idea to have a professional home inspector take a look at the place over before the transaction continues. Though it may cost a few hundred dollars, the peace of mind it can offer and the troubles it can prevent are worth it.
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There are plenty of inspectors out there, so it is important to do some investigating first. Get referrals from your realtor, ask friends or family who have recently bought a home, and talk to inspectors you find yourself. Ask some questions before choosing one, including:
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1. How long have they been in the home inspection business?
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2. Do they specialize in residential or commercial property?
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3. Do they belong to a professional organization, such as the National Association of Home Inspectors?
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4. Can you be present when the inspection takes place?
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5. How long does the inspection take?
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Let’s pretend that you’ve chosen your home inspector. What exactly does he inspect? The report will include the following and maybe even more:
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1. Quality and quantity of home insulation.
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2. Condition of the home’s attic, roof, roof construction, shingles, flashing and gutters, etc.
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3. Condition of its structural elements, such as beams, joists, rafters, girders, door and window frames, etc.
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4. Overall construction of walls, ceilings, floors, roof and foundation.
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5. Condition of the Toilets, showers, sinks, faucets, traps, pipes and plumbing systems. Identification of piping materials used for potable water, drains, waste, and vent pipes, including their overall condition.
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6. Water heaters, furnaces, air conditioning, duct work, chimney, and fireplace.
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7. Condition of the wiring systems, including the main electrical panel, circuit breakers, types of wiring, grounding, exhaust fans, receptacles, ceiling fans, and lighting fixtures.
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8. Household appliances, such as dishwasher, range and oven, built-in microwaves, garbage disposal, smoke and carbon-monoxide detectors.
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9. Evidence of any pest, moisture or mold problems.
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10. The home’s exterior, such as siding, landscaping, sprinkler systems, grading, drainage, driveways, fences, sidewalks, trim, doors, windows, lights and exterior receptacles.
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Afterwards, you will receive a home inspection report. These reports do not describe the condition of every component if it is in excellent shape. It will, however, note every item that is defective or needs service. The serious problems may include health and safety issues, roofs with a short life expectancy, furnace and central air troubles, foundation deficiencies, and moisture or drainage issues.
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No home is perfect and nearly every home will have issues upon a home inspection, including new homes. After the inspection, you can make a more fully informed choice. Depending on what the report says, you can choose not to purchase the home, discuss repairs, or negotiate a price reduction from the seller. If you have a choice, it is best to hire your own contractors and supervise repairs yourself.
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Some <a href="https://www.barkerhedges.com/buying/">home buyers</a> feel an inspection is unnecessary, especially if they are buying new construction. There are only so many aspects of a home that you can inspect yourself, however. It is the problems that aren't readily apparent, such as code violations, faulty wiring, a carbon monoxide emitting furnace, or a failing chimney which could be found in a newly constructed home. Spending some money up front can save you much more in the long-run.2008-04-06T20:17:00-07:002013-07-10T00:42:24-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1899Great Time to Invest in Minneapolis Real Estate?HomeVestors of America Inc., otherwise known as the “We Buy Ugly Houses” people, has named the top ten real estate investing markets for the first quarter of 2008. HomeVestors buys, refurbishes, and sells modest homes. The company based its findings on the number of houses bought in each market by its franchise network during the first quarter of this year. The full list is as follows:
Top Ten Cities For Real Estate Investing, 1st Quarter 2008
Dallas, Texas
Houston, Texas
Atlanta, Georgia
Fort Worth, Texas
St. Louis, Missouri
Philadelphia, Pennsylvania
San Antonio, Texas
Denver, Colorado
<a href="https://www.barkerhedges.com/minneapolis-real-estate/" target="_blank">Minneapolis, Minnesota</a>
Phoenix, Arizona
It is important to recognize that this is only one organization’s measurement of the market, but there may be something to it. Conditions in Minneapolis have created a unique buyers’ market. As this previous post discusses, the price of homes across the Twin Cities area tumbled in February. At the same time, the market has been flooded with homes for sale. To make their homes more appealing in this competitive market (and to get rid of unwanted properties), sellers have aggressively lowered their sale prices. All this adds up to plenty of available real estate at rock bottom prices. Okay, so maybe HomeVestors is on to something, even if their methods don’t appear to be all that scientific.
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Real estate investment isn’t for everyone. Not every person wants to be or should be a landlord. But if real estate investment is something that has interested you, now may be the time to act.2008-04-04T15:50:00-07:002013-07-10T01:18:00-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1896Ten Reasons to Buy a New HomeOne of the first decisions you make when you begin to look a <a href="https://www.barkerhedges.com/buying/">buying a home</a> is whether to buy new or purchase an existing house. While there are some advantages to purchasing a resale home, here we will discuss many benefits of buying a new home.
1. New Home Pricing. Though the price of a new home may be higher than the price of an existing one, a new home is likely to need fewer repairs or replacements. Also, if you buy a new home in a desirable neighborhood or location, the value may increase even more and you will likely sell your home for a higher price than when you bought it if you decide to move.
2. A Well Planned Neighborhood. Builders incorporate desirable amenities such as recreation areas, neighborhood clubhouses, swimming pools, playgrounds, sidewalks, and paved trails into new communities. Do you seek to live among older residents, families with young children, or in an area that encourages an active lifestyle? New home buyers get to choose what type of community they want to live in as well as their home site or unit. Choose a home at the end of a cul-de-sac if you desire to live around minimal traffic. Perhaps a home situated near a park is what you seek? The location is your choice.
3. Modern Design. New and better ways of constructing homes are being developed every day. Likewise, consumer trends change and builders respond by drafting floorplans to accommodate modern client needs, like oversized family rooms, larger closets, built-in media niches, and large, up-to-date kitchens.
4. Warranties. A new home comes with a builder’s limited warranty, which is something an older home cannot provide. A warranty typically covers new appliances, carpets, mechanical equipment, and overall construction, such as roofing and siding. As with all warranties, they don’t last forever but they can cover various items for one to ten years!
5. Energy Efficiency. With modern insulation, better windows, and more efficient heating and cooling systems, new homes are much more energy efficient than an existing home. Also, new homebuilders are required to meet stricter energy codes than in the past. This is an enormous cost-saving benefit when one considers the price of oil and fuels these days.
6. Modern Wiring. With the popularity of home computers, media centers, surround sound systems, and other modern technologies, new homes are typically wired to accommodate electrical components that weren’t around when scores of existing homes were built.
7. Health Conscious Construction. New homes may offer health advantages, as they are built with modern building materials. Contaminants that may exist in a resale home, such as asbestos or lead paint, are nonexistent within a new home.
8. Modern Appliances. Homebuilders are able to offer the latest state-of-the-art equipment at the time of a new home’s completion. Dishwashers, stoves, microwaves, refrigerators, all fully installed with modern water and energy standards.
9. Low Maintenance. The latest in building materials also translates into the ultimate in convenience for new home buyers. New homes are practically maintenance-free for up to ten years and in some cases, beyond.
10. A New Home Is All Yours. When you purchase a newly constructed home, you have a hand in creating the home you desire, instead of having to change the home to your preference. From the flooring to the appliances, all aspects of the home can be fit to your tastes from the day you move in.When you're ready, the Realtor team at Barker & Hedges can assist you with <a href="https://www.barkerhedges.com/about/" target="_blank">buying a home</a>! 2008-03-30T16:14:00-07:002013-07-05T14:23:25-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1893Bowing or Buckling Foundation WallsOver the years we have helped hundreds of <a href="https://www.barkerhedges.com/buying/">buyers </a>into homes and Bryan Stuckey with Inspecta Homes has been our inspector of choice. He recently did an inspection for a buyer of ours and in the process found one of the foundation walls to be slightly bowed. As any good inspector would do for their client, he recommended bringing in a foundation expert to take a second look and give an opinion. This situation is more common than you would think...the problem for our real estate team has been finding a company that can give an opinion at a reasonable cost. Complete Basement Systems has done numerous inspections of foundation walls for us and provides FREE estimates. We typically use Jon Ahern if at all possible. He is a true professional and gives great advice to our clients. They also deal with basements with water issues as well so look them up if you are having basement issues!2008-03-27T12:13:00-07:002013-07-09T23:29:42-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1886Steps Towards Purchasing Your First HomeIt is easy to become overwhelmed these days when it comes to <a href="https://www.barkerhedges.com/first-time-home-buyers/">buying a first home</a>. There are ways to prepare yourself ahead of time, though. The information below can help smooth your journey towards home ownership.
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1. Review your credit. Mortgage lenders will be closely evaluating your credit and finances. Make sure that you know what is on your credit report first. Start by requesting a copy of your credit report from the big three credit agencies - Equifax, Experian and TransUnion. When you receive your report, review it carefully for mistakes. If you find an error, take corrective action by following the instructions the credit agency provides. The sooner the process starts, the better, as the investigation will take time.
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2. Take steps to raise your credit score. First and foremost, this means paying every bill on time every month. After that, it means paying down as much of the debt you already have. Not only will this raise your credit score, but it could free up some cash later when you’re finally making monthly mortgage payments.
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3. Learn about mortgages. Each type of mortgage has its pros and cons. Finding the one that is right for you will depend on your personal situation. Factors that will affect this are how much you have for a down payment, how long you plan to own the home, what is your tolerance to monthly fluctuations, etc. Be thorough in your research, as having the wrong mortgage can be as bad as choosing the wrong home.
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4. Make a wish list. Write down all the things you want from a home. Include the size, features, location, etc. Categorize each item on the list as a "need" or a "want." Having a list ahead of time will help you save time, narrow your search, and help you stay focused.
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5. Find a real estate agent. Even though there is a lot of information on purchasing a home available, having a professional Realtor to represent you is a good idea. The peace of mind professional guidance offers can remove a lot of worry throughout the home buying experience.
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6. Get pre-approved for a home loan. Pre-approval from a mortgage lender will help you in several ways. First, it will reveal realistically how much you can afford. Second, it will help you identify any credit problems you may have early on. Finally, it will show home sellers that you're serious, which can be helpful if there are ever multiple buyers.
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7. Get a home inspection. So you’ve found a house you think you really want. Whether it’s a new home or an older one, a home inspection is a good idea. They cost around $500, which is pretty inexpensive compared to what major home repairs would cost. A home inspector will examine the home's roof, foundation, heating and cooling systems, and other important areas. Though it’s impossible to find everything that is wrong in a home, an inspection can go a long way towards offering peace of mind.
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For a more in-depth discussion about steps towards buying your first home, register to attend a <a href="https://www.barkerhedges.com/free-upcoming-home-buying-seminar/">Barker & Hedges home buying seminar</a>. At these monthly events, all aspects of the home buying process are covered including how to pick a Realtor, how much money you will need for down payment, home buying tips, the home buying process, the purchase agreement from start to finish, and more.?2008-03-22T10:16:00-07:002013-07-09T17:56:47-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1881Minneapolis and Saint Paul Area Truth In Housing and what it means to you when Buying or Selling A HomeIf you have ever wondered exactly what a Truth in Housing or Time of Sale inspection is and what it means to you as a <a href="https://www.barkerhedges.com/selling/">home seller</a> or a <a href="https://www.barkerhedges.com/buying/">home buyer</a> you have stopped at the right place. What you may not know is that Truth in Housing inspections are not required in all cities in the State of Minnesota. I'll just take a moment of your time to clear it up for you starting on the home selling side.
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If you have made the exciting decision to sell your home you may be required to have a Truth in Housing inspection completed on your property. What this means is that before your house gets listed on the market an inspector (either private or city mandated) will come to your home to look for potential problems that the city feels the buyer should know about. Some items that they look for are issues with the plumbing, electrical, heating or cooling systems, wetness or dampness in the basement area, or an unstable foundation. If you are worrying about whether or not you have to fix everything that the inspector finds, be rest assured that only some cities require you to fix items. The cities that do require you to fix items are looking for those items that pose an immediate hazard to the occupents of the house. Other items are fine left alone but will be disclosed to potential buyers in a report drafted by the inspector.
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As a home buyer you should always keep in mind that an inspection protects everyone. If the home you are interested in requires a Truth in Housing inspection then you are one step ahead in the home buying process, as potential hazards have been documented and are available to you. It is also recommended that you request a home inspection when submitting a purchase agreement so you make an informed decision on the potential hazards you face with that home.
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If your unsure whether your city, or the city your interested in living in requires a Truth in Housing or Time of Sale inspection or if you would like to see what the requirements are for each city, please click on the attachment to get more information.?2008-03-21T12:35:00-07:002013-07-06T09:33:15-07:00Matt Barkertag:barkerhedges.com,2012-09-20:1878Why Choose a Realtor Over a Real Estate Agent?Purchasing or selling a home is a very emotional situation. The average American will buy or sell a home only 2-3 times during their lifetime and for many people, it will be the largest investment they make. This transaction is a significant event for anyone and because of that, it’s important that it’s done correctly. Choosing the right individual or organization to be your representative will have an incredible impact on the end results of your home purchase or sale.
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Many real estate agents are professionals, but not all of them are REALTORS®. Some people believe that anyone who sells or buys real estate is a Realtor, but that is incorrect. The term “real estate agent” can generically describe someone licensed by the state that makes their living by buying and selling property on behalf of others. Only real estate licensees who are members of the National Association of Realtors® can call themselves a REALTOR®.
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The similarities between a Realtor and a real estate agent are great. They both minimize the inconvenience a buyer or seller will experience in during the transaction, saving time, money, and frustration. Both may advise, assist, and represent the client in negotiating, presenting an offer or counteroffer, financing, inspections, and closing. They both must apply for licenses in order to buy or sell real estate within the state in which they practice. But this is where the similarities end.
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First, let’s talk about qualifications. Realtors are expected to maintain a high level of knowledge of the process of buying and selling property. Realtors are expert consultants, who complete education classes regularly in order to keep current with local and federal laws, ethics, fair housing, and all matters related to real estate.
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Next, let’s talk about honesty and integrity. Realtors subscribe to high professional standards and a strict Code of Ethics. The Code of Ethics contains rules of fairness and honesty that govern a Realtors conduct. A home buyer or seller that chooses to employ the services of a Realtor is assured loyalty, confidentiality, and lawful handling of monies. The Code of Ethics also provides access to arbitration and dispute resolution to help settle differences between sellers and buyers, and between consumers and real estate practitioners, without costly and time-consuming litigation.
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Finally, there is specialization. The National Association of Realtors® offer 21 officially endorsed designations and certifications to their members. A Realtor® that has a designation or certification has a particular expertise in a given area. Some examples are as follows:
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ABR - Accredited Buyer Representative
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ALC - Accredit Land Consultant
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CCIM - Certified Commercial Investment Member
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CRS - Certified Residential Specialist
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GAA - General Accredited Appraiser
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A full list of the different designations and certifications can be found here.
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We here at Barker & Hedges are proud to say that we are e-PRO® certified! That means that we are Internet Professionals! In this electronic era, it’s imperative that real estate marketing practices adapt to the changing times. We have been fully trained in all ethical, legal, and regulatory standards of conducting business over the Internet. In addition, we’ve mastered the art of using technology like e-mail and websites to market your home and communicate efficiently with connected clients.
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We’re also working to become Accredited Buyer Representatives. ABR® designation is the standard of excellence in buyer representation. This designation is awarded by the Real Estate BUYER'S AGENT Council of the National Association of REALTORS® to real estate practitioners who meet the specified educational and practical experience criteria. We haven’t quite finished the work necessary for this yet, but as soon as we’ve finished it, you’ll certainly read about it on this blog.
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Real Estate is a very competitive industry. Choosing the right representation is important. When you are searching for a <a href="https://www.barkerhedges.com/about/">Twin Cities Realtor</a>, please choose carefully. And be sure to consider the expert team at Barker & Hedges to help you settle into the home of your dreams.2008-03-08T07:32:00-07:002013-07-09T14:34:45-07:00Matt Barker