Winter in Bemidji

The winter season is upon us in Northern Minnesota.  It may not be officially winter yet, but in my opinion when the leaves are off the trees, the ground is covered with snow, and temperatures are consistently below freezing, it means winter is here!  For many that sounds negative, but I personally love winter.  It is a time when life slows down a bit, we don't have to worry about catching every possible ray of sunshine and we can take time to recuperate and enjoy time with our family and friends.  Many people relocating to the area worry about winter.  Driving on snowy/icy roads, shoveling snow, finding winter activities, and staying warm are some of the many concerns buyers have when moving to the area.  I have found that if you are able to find some joy in winter it makes the 5-6 months of winter pass by quickly. Whether you are a long time resident looking for something new to do or brand new to the area here are just some of the activities you may consider trying out this winter to make your winter in Bemidji more enjoyable.

1. Check out the Bemidji Chamber of Commerce events calendar at http://business.bemidji.org/events/. Activities include Lutefisk dinners, free concerts, art festivals, ice fishing tournaments, and much more.

2. Go to a Beaver Hockey game at the Sanford Center.  Nothing says Northern Minnesota like Hockey! For the schedule of games go to http://www.bsubeavers.com/mhockey/

3. Participate in Bemidji City's Parks and Recreation programs. Sign up for their weekly newsletter by email  park.recreation@ci.bemidji.mn.us or click here for the calendar Bemidji Parks and Recreation Calendar

4. Go to Pecha Kucha.  It's an amazing unique area event that you would usually find in a big city, right here in Bemidji, Minnesota! http://www.pknbemidji.org/

5. Take a class through Bemidji Community Education www.bemidjicommunityed.com. You can learn to dance, get fit, start a new craft, take a computer class, and more.

6. Go ice skating or play hockey.  You can check out one of the many outdoor rinks or try general skating indoors. For the warming house schedules click here Arena Schedule.

7. Check out the Bemidji State University Outdoor Program Center.  You can sign up for activities or rent winter gear. Below is an example of their rates. http://www.bemidjistate.edu/students/recreation/opc/rentals/

Winter Gear	Hour	Overnight	3 Days	7 Days
Snowshoes	-	$5	$10	$15
Touring XC ski package	-	$5	$10	$15
Auger, rods, scoop, bucket	-	$5	$10	$20
Ice fishing clam shelter	-	$10	$25	$30

8. Go downhill skiing or tubing at Buena Vista.  You usually don't think of skiing when you think of Bemidji because of our relatively flat landscape. But we happen to be located on the Continental Divide which provides for a beautiful landscape!

9. Go Ice fishing!  You can rent your equipment from the Outdoor Programing Center or an area resort and head out on one of our hundreds of area lakes within 20 miles of Bemidji.   Click here to view the Lake Bemidji Webcam to watch the progress of the lake freezing.  But remember that the the DNR recommends the following new clear ice condition guidelines:

• 2" or less - STAY OFF
• 4" - Ice fishing or other activities on foot
• 5" - Snowmobile or ATV
• 8" - 12" - Car or small pickup
• 12" - 15" - Medium truck 

9. Visit the Beltrami County History Museum, the Headwaters Science Center, or the Headwaters School of Music and Arts for an afternoon of fun. Or for more indoor fun you could go bowling at the Bemidji Bowl, catch a movie at the Bemidji Theater, or paint your own pottery at Glazed and Amuzed.

10. Get outdoors!  Dress warm and enjoy winter.  Go sledding, snow showing, go for a walk on area trails or under the holiday lights by the lakefront, build a snow fort, play broomball, watch pond hockey, build a snowman, cross country ski or snowmobile on the many miles of groomed trails.

If you are still bored after all these suggestions, I have more! Bemidji may be a small town but it has all the amenities and opportunities of a big city....without all the traffic!  Bemidji is a wonderful place to grow, raise a family or retire.  All you have to do is open your mind and broaden your horizons!

FTHBFAQ

No, my caps lock is not stuck on... it's First Time Home Buyers Frequently Asked Questions or FTHBFAQ!

Q: How much money do I need to save before considering buying my first home?

A: It depends, but recently I have seen some buyers come in with as little as $500.  You should have at least $500 saved for earnest money and approximately $300-$400 for a home inspection.  Those are costs that a seller cannot pay on your behalf.  There are still 0% down programs out there like Rural Development and VA loans. And you can ask the seller to pay for your closing costs!  I recommend talking to a local lender to get pre-qualified.  They can let you know specifically what they'd like to see.

Q: Why should I buy instead of rent?

A: #1 Because it's cheaper to own instead of rent in the Bemidji area. With the college rental market driving rent prices up you can buy a similar home for nearly half as much monthly in a mortgage payment than the cost of rent. #2 Tax deductions.  You may be able to deduct the interest you pay on your mortgage and your real estate taxes on your tax return. #3 It's an investment.  Instead of paying down someone else's mortgage you can reap the benefits of home ownership buy owning your own home.

Q: Are foreclosures good deals?

A:  I would caution first time buyers on foreclosures.  There are often unseen issues that can not be detected that you will have to deal with on your own once you are the home owner. Foreclosures are typically sold as-is because the bank has never occupied the property.  They couldn't possibly know all the issues that could be associated with it.  The other problem you may run into is condition.  Many loans that are typical FTHB loans like Rural Development, VA or FHA require the house to be in good condition. And some of those programs won't even finance the home if it is bank owned.

Q: How do I choose a Realtor?

A: There are many ways to choose.  The most common is a referral from a friend or family member that had a pleasant experience with a local Realtor.  You can also choose based on qualifications, like experience, designations, and availability.  You will want to choose a Realtor whom you can work well with and who has the knowledge and experience to walk you through the process.  Buying your first home can be confusing and scary, since it is likely the biggest purchase you have made in your life so far.  But with the right Realtor by your side they should be able to answer all your questions and calm your fears.

If you are a FTHB and have more questions feel free to ask!  You can post here, call, text or email me with questions.  Happy House Hunting!

Bemidji Summer In Review

Summer in Northern Minnesota is always busy.  If you've ever spent a winter in Minnesota, you know that once summer hits you better enjoy every moment to the fullest before winter strikes again!  Between catching every ray of sun I could and selling houses there wasn't much time left over to blog, but the good news is I'm back!  I'm sure you are wondering how the Bemidji real estate market fared this summer. The verdict is in and it was better than last year!  Many real estate agents in the Bemidji area believe we have hit rock bottom and we are on our way back up, or that at least we have leveled out.  I analyzed the MLS statistics for residential home sales in Bemidji between May-August 2012 comparing it to that same time period last year and this is what I found.

Bemidji Summer 2012 vs Summer 2011:

13% less homes were listed
3% more homes sold
6% increase in average sales price
148 average days on market- no change

The most interesting statistic I found was the change in the average sales price.  The average sales price of a single family home in Bemidji rose from $154,006 last summer to $163,894. I believe that this is due to the fact that home buyers are able to get a larger mortgage than in past years because of the unbelievably low interest rates.  In 2010, the average sales price in Bemidji price was $149,241.  What this means to me is that buyers are spending more on their home.  It does not necessarily mean that homes are appreciating; however supply and demand can effect appreciation.  A lack of quality inventory in a certain price range can result in a buyer paying more for a home because of lack of a better option and possible multiple offers.  National statistics show that homes are still depreciating by 3% per year.  Hopefully this will be the last year that we see a negative change.  Here's to enjoying the fall and looking forward to positive changes in the future!

The Ice is Out - Think Summer at the Lake!

The ice is out on area lakes and it's got everyone daydreaming about sitting on a lounge chair next to their favorite lake or casting a line, landing the big one. Since moving our family to the lake in 2010, I cannot imagine life not on the water. I love getting home after a long day of showing houses, jumping on the pontoon and going out for a leisurely cruise.  No need to pack a bag or load the boat here, we are ready to have fun on a moments notice! 


One of my absolute favorite activties on the water is "picture fishing". I love grabbing my camera, getting out on the water and capturing as much wildlife as possible.  We watched this mama loon raise her babies all the way from nesting in the spring, teaching them to fish all summer, and finally flying south for the winter.  We are eagerly anticipating the return of the loons this spring.  There is nothing more majestic than the call of the loon.


Buying a lake home or summer cabin is now more affordable than ever.  The average lake home price in the Northwest Minnesota MLS in the past year was only $233,201!  Currently in the Bemidji area alone there are 75 lake homes to choose from ranging from $59,000 to $838,000.  In the Bemidji area lake homes are typically listed between Spring and Fall.  This year we anticipate the season starting early with the exceptionally warm spring are experiencing.

Start thinking about your future now!  Many future retirees are buying their lake lot now, while prices are down so they can build when they are ready to retire.  Currently in the Bemidji area, available waterfront lots range from $9,900 to $1,499,000.  There is literally something for everyone! Whether you are looking for that babbling brook, a low maintenance CIC, a never ending sand beach, or a secluded river front property you will find it here in Northern Minnesota.  To help you decide what type of waterfront suits you best you need to ask yourself what what you are looking to get out of your lake or river?  Is it the views you desire?  Do you like to fish? Would you like an area for swimming? Do you enjoy recreational activities like jet skiing, tubing or water skiing?  Or are you in it just for the wildlife that flocks to the waterways?  These are all important questions when choosing your new waterfront property.  Once you answer these questions, contact me and I will help you find a property that would fit you.  You can also use the DNR lake finder at http://www.dnr.state.mn.us/lakefind/index.html to search area lakes to determine their classification.

As I write, I dream of summer barbecues, swimming, tubing, and fishing on the pontoon followed by unforgettable summer sunsets like the one pictured.  People come from all over the country as tourists to see the beautiful area we live in, just to stay for a week or a few months.  You can live like a tourist every day of the year!  Why wait until you are retired to live your life to the fullest?  Call me today to get out there and start looking for your dream home!

Tenants and Toilets

The next step after you purchase your investment property is to rent it.  Time to prepare yourself for Tenants and Toilets!  Most investors like the idea of rental income from real estate but they don't want to go through the motions of selecting tenants, moving them in, collecting rent or fixing toilets.  Here is an outline that you can use to minimize the headaches!

1. Prepare the home for renting.  The better condition your rental property is in the better chances you have of getting good renters.  Think to yourself, "What type of person would live in this house?"  If the house is in poor condition you will probably get renters who are in poor condition, ie. poor credit, poor job (if any), poor rental history.

2. Selecting tenants. Always use an application.  Have the prospective tenant fill it out and return it to you.  If they do not pass this step then chances are they won't pay rent on time either.  Call their references, do a background and credit check.  Make sure to ask them why they are moving and when they plan on moving early on in the process.

3. Moving in.  Use a move in check list and take pictures of the property prior to the tenant moving in.  This way, if there are damages, there will be no discrepancies in the stories.

4. Use a Home Manual.  Have a home manual for each property, outlining what to do in case of an emergency, how to check for simple problems like a tripped breaker, phone numbers for utility companies, policies and procedures.  This can eliminate those 1am phone calls about not having hot water, when it may be as simple as a tripped breaker.

5. Lease Agreement.  When at all possible get a year lease or more.  Have a good lease drawn up and make sure all your bases are covered and that it complies with the Landlord and Tenant Act https://www.revisor.leg.state.mn.us/statutes/?id=504B.  For Bemidji City codes check out www.ci.bemidji.mn.us  

6. Collect a Deposit.  It is a good rule to collect a deposit in the amount equal to one month's rent.  Keep it in a separate bank account.  You will be returning it to the renter when they vacate if there are no damages.

7. Collect Rent.  Have a clear rent payment policy in place of what forms of payment you accept and where it is to be sent or dropped off at.  If rent is not received on time charge a late rent penalty fee. 

8.  Retain Residents.  If you had good renters, try to retain them for another lease period.  This can save you a lot of headaches by not having to select new tenants.

9. Have a list of preferred contractors. It doesn't always pay to be a DIY'er!  In the long run you will probably save more in time and money by hiring a professional rather than trying to do all repairs yourself.  However, you should have a general knowledge of how the home works.

Follow my easy steps and you will be on your way to being a successful landlord.  And, if you buy an investment property from me, I offer FREE advice and resources to help you get started!

Outlook for 2012

We are all children at heart.  Especially when it comes to asking questions!  Consumers today remind me of my 2 year old daughter, asking the same questions over and over and hoping/praying for different results.
 "Can I have candy?"   "Are we there yet?"  "How about now?"

Thankfully adults have more mature questions like, "How's the market, now?"  So without further adieu I will try and predict the market in the Bemidji area for 2012!  Using local MLS statistics I have compiled some facts and some speculation based on what I have heard and what I know to be true.

•  The total number of listings in Bemidji is down 21%. I believe that more sellers are waiting until prime spring/summer season to list, because the need to sell isn't as great as it has been in the past few years.
•  There are 26% more homes pending this year than last year at this same time.  With the mild winter it has been easier for buyers to get out to look at homes.  Also, I see an influx of first time home buyers fueling the market and getting things moving.  
• 41% more homes sold.  This speaks for itself.  The market is rebounding and homes are selling.
• The total volume of homes sold is up 90%! In my opinion this shows that with the first time buyers finally fueling the market, sellers are able to be move-up buyers and move more expensive homes that in the past few years have been taking longer to sell.  Also, because interest rates are so low buyers are able to afford a larger home.
• The average sale price is up from $122,016 last year at this time to $164,313 year to date.  I believe this is due to the fact that the average buyer is able to buy a larger home because of low interest rates. 

One of the other questions that gets asked frequently is, "What effect do foreclosures have on Bemidji's market?"  I believe that we will start to see less foreclosures in our area compared to the past 5 years and that the average price of those foreclosed homes will go up.  During those past 5 years we have had an influx of lower valued foreclosures that have brought the average sale price down for our area considerably.  Homeowners with homes of greater value seem to have been able to hold on to their homes longer, but we are now starting to see some of them come on to the market as foreclosures.

I hate to sound like a broken record or like my 2 year old, but remember, NOW IS THE TIME!  Don't miss out.  I believe that the market is now on the rise and people will be kicking themselves in the future for missing out on this wonderful opportunity to buy in Bemidji!  So get out there and find your dream home, vacation cabin, or rental property today!

Little Green Houses

Now you know what you need to get started in investment real estate: Little Green Houses!  Now let's expound on HOW?!  I mentioned earlier that there are "creative" ways to purchase your first investment property, now I will expound on those ways along with the more traditional ones.

• Cash is King (whether it's your own or borrowed from a rich friend or relative) You may be able to secure a better "deal" with this method.  Often sellers are more negotiable when a buyer pays cash, because it can close faster and with less issues.

• 20% cash down and finance the rest through your favorite mortgage banker. This option would be for a buyer who has 20% of the purchase price in liquid funds of thier own.  How do you get cash like this you say?  Start saving or sell things you don't use/need anymore.

• 20% down with Other People's Money (OPM)!  How do I get OPM, you say?  Either from a friend or relative, Home Equity Loan or Line of Credit on your personal house, or from another investor/business partner. 

• 10% down!  My favorite banker, Anne Kehoe from Wells Fargo Home Mortgage, introduced me to a program where you can put as little as 10% down on an investment property if it is a HomePath property!  This means that it is owned by Fannie Mae.  To view a list of eligible homes in the area visit http://www.homepath.com/ . To find Anne go to www.wfhm.com/wfhm/anne-kehoe

• Contract for Deed.  This is how I bought my very first investment property!  They are difficult to find because many sellers are not able to offer a contract for deed. But if you are unable to obtain a traditional mortgage this is another avenue.  As long as the terms are right and the house is a good fit.  It works well for people who have a good down payment, but for some reason cannot get financed.  (For me it was because I was self employed and could not show 2 years of income at the time.)

• Credit card.  I do not recommend this method but I have to tell you that I used it once!  I bought a lot at the county land auction for $13,400 with a credit card check.  It was a promotional no interest, no payment for 6 months and I had a limit of $13,600!  I knew that I could pay it off from another sale that was coming up within that 6 months so I took the plunge.  USE THIS METHOD WITH EXTREME CAUTION!!!

If you or someone you know has always dreamed of investing in real estate NOW is the time.  First of all, prices are down and rates are still incredibly low!  If you'd like to get started NOW, contact me TODAY! Or you can always check out my website to view all of the area listings at: www.realliving.com/mandy.gazelka  Happy hunting!

Getting your home to shine

When selling your home in the current market it has to be the best in it's price range in order to get it sold in a reasonable amount of time.  In a world where everyone wants more for less, in order to get the best price possible for your home, it has to shine!  As I was cleaning my own home I began to think of what my home would look like if it were on the market and what things I would need to do to prepare to sell.  Looking around my kitchen I looked over at my fridge (top), covered in precious artwork done by my 2 little girls.  While I love every single one of those masterpieces, if I were selling, I would take them down (bottom) for showings or during the duration of my listing as I'm sure it would be distracting for potential buyers to see the beautiful paintings, to-do lists, and calendars.  The same goes for too many family photos.  While you want to make your home look like a happy place to live you also want the buyers to look at your house, not your life.  The only time I would recommend photos would be if you lived on a lake or in the country where you were able to capture pictures of the wildlife or big fish you caught on your lake!

If the thought of even getting to the place where you are ready to worry about these "little things" scares you, it may be time to hire a professional.  Like I said in a previous post, cleaning, de-cluttering, doing small repairs and painting are the the most important and most cost effective ways to increase your home's value and decrease it's time on the market.  In the busy world we live in where not everyone has time to get these projects done, a great place to turn would be a home stager.  In the Bemidji area I would recommend checking out Kendra Fuller at Urban Essence Interiors on facebook or on the web at http://www.urbanessenceinteriors.com/  By hiring a stager/painter you can check off half of your to-do list while getting top notch advice.  Not everyone has the same tastes in decorating so having gender and taste neutral style can help potential home buyers have a vision of what the home would look like if they were to live there. If you are a seller this is exactly what you want; people to "mentally move-in" to your home!

Statistics show that staged homes spend 50% less time on the market.  Average days on market in the Bemidji area so far this year is 180 days.  Cutting that in half could save you a lot of headaches. Also, a staged home can sell for up to 7% more than a non-staged home.  The cost of staging your home now will be much less than a price reduction later.  So whether you are a DIYer or you need a helping hand, taking the time to prepare your home for sale is a must!  Don't forget you can always call or email me with questions or for a free consultation.  Happy Selling!

Rock Bottom?

Being a Realtor people are constantly asking me how the Bemidji market is.  Lately, their favorite question is: "Have we hit rock bottom yet?"  My answer: "We won't know until we start going back up."

If you take a look at the chart below you will see a slight decline in the depreciation between 2009 and 2011.  In 2009, depreciation for the Greater Bemidji Area (56601 zip code) was at is all time 10 year high at around -6% per year. Since then depreciation has slowed to around -3.7% for the Bemidji zip code.  So, even though we haven't hit "rock bottom" on home sale prices, it appears that we have as far as the rate prices are falling at.

The chart and statistic information can also be viewed on my website at www.realliving.com/mandy.gazelka Click on local information and you will be able to search any zip code or address to obtain information on housing, people, economy, schools, environment, and quality of life for any given neighborhood or area.

Another great tool that was just released by Beltrami County is http://www.crimereports.com/ .  This website allows you to view all the calls for assistance in any given area in Beltrami County starting this year.  It will hopefully alleviate some of the calls to the local police station inquiring about the crime rates in certain areas or neighborhoods.  It can also assist potential home buyers in choosing an area to live in based on the perceived safety of the neighborhood.  Check it out and let me know what you think!

The Game of Monopoly

When it comes to real estate investing, Monopoly is the name of the game!  The object of the game (as defined by the actual game) is to become the wealthiest player through buying, renting and selling property. If we take the principals of Monopoly and apply them to real life real estate investing here's what we have: He who owns the most little green houses and red hotels WINS! 

If it is your goal to be come wealthy I believe that real estate investing is a great avenue be on.  In the rules of Monopoly it also states that "you may buy and erect at any time as many houses as your judgement and financial standing will allow".  You must exercise caution and use your best judgement, even some of the greatest real estate investors in history have been bankrupt a few times. As with any investment, there is a certain amount risk involved.

Here is my light hearted approach to explain what you need to become a real estate investor using the game of Monopoly as an example:


1. Decide if you have enough money to purchase a property (pay with cash or give a mortgage to the bank)



2. Identify a property

3. Purchase the property

4. Collect rent


5. As time goes on, decide whether it is in your best interest to sell or improve the property

6. Repeat



Believe it or not, I actually use this as a model in real life!  My husband and I often say to each other, "little green houses, BIG red hotel, little green houses, BIG red hotel".  It is our goal to someday own commercial real estate (red hotels) as a passive income generator.  To achieve the goal of being a wealthy real estate investor you need to start somewhere by buying your first little green house.  Once you own one piece of income generating property it makes it easier to buy more by leveraging what you already have.

For most people, getting started by buying that little green house is the hardest step.  Often it takes creativity on the investors part to make it work financially. One great way is to look at the assets you already have and figure out if you can use them as leverage to make your first purchase. 

You always hear people saying, "Man, I wish I would have bought real estate back in the '90s."  Don't make that mistake again by missing out on one of the best buying times in our history, you can hear yourself saying it now, "Man, I wish I would have bought back in 2012!"

For a list of little green houses in the area email me at mandy@firstrealtybemidji.com today!

2011 Year End Review

We've all heard the news about the real estate market around the country and in the metro areas, but I'm sure you've wondered how we are doing up here in Northern Minnesota.  Here are the numbers:

654 Listings Sold (up 5.5% from 2010)

2238 Properties for Sale in 2011

$166,463 Average List Price (down only 3.57% from 2010)

$115,183 Average Sale Price (down 10.6% from 2010)

161 Average Days on Market

Statistics in this post were obtained from the Northwest Minnesota MLS.

What do all these numbers mean?  It's taking longer to sell houses for less these days.  I feel that a big part of the 10.6% depreciation that we experienced in 2011 was due to foreclosed home sales.  Many of the foreclosed homes in 2011 were in poor condition, and therefore brought a low sales price which brings down the average.

The good news for buyers is that there are many homes to choose from, sellers are coming down from their original list price an average of 13%, and interest rates are still at all time lows! Have more questions on Northern Minnesota real estate market conditions?  Don't be shy, just ask!

Preparing to Sell

In Northern Minnesota, real estate tends to have a season.  During the coldest of winter months buyers are less active and homes typically don't "show" as well without the green grass and blue skies.  Most sellers wait to put their homes on the market in the spring, unless they have the need to move quicker.  Which brings me to what you can do if you are a seller while you wait for the spring thaw!

1. De-clutter.  Remove as many personal items, family photos, and kick knacks from your home as possible. You want buyers to be able to look at the house instead of focusing on your stuff.

2. Deep Clean.  Pay special attention to those places that get touched often but most people don't think about.  Light switches, door knobs, walls near doors, windows and baseboards.  A clean house shows a buyer that the home is well cared for.

3. Repair.  Fix any of those little nagging items that have been on your list that you may live with day to day but to a buyer they show neglect.

4. Paint.  Freshen up a room or two or just touch up paint as needed.  Make sure to choose neutral colors to appeal to the largest audience.

4. Call ahead of time.  Call me and I'd be happy to walk through your home with you to let you know what I think you could do to help you sell your home faster and for the best price when the time comes.